Are Banks Prioritising New Customers over Old?

By September 25, 2018Buying, Investing, Selling


With the royal commission shaking up the mortgage landscape new customers have become the main target as banks wrestle over mortgage market share.

Six of the 10 biggest mortgage lenders now offer discounts to new customers, with 170 home-loan products aiming at them directly. The discounts are in play despite no interest rates move from the Reserve Bank in two years.

Three of the big four banks offer discounts to new customers. ANZ made headlines this month by cutting its standard variable rate by 0.34 percentage points for new borrowers.

For example, RateCity says a NAB customer who took out a $400,000 loan a year ago could be now paying up to 0.48 percentage points more for the same product compared with a new customer. In dollar terms, that equates to up to $110 extra per month or $1320 per year

Discounts offered to new customers, particularly those presenting as low-risk borrowers may be further swinging the pendulum towards first-home buyers and away from investors and interest-only borrowers.

Lending to property investors has slumped 16 per cent in the past year, while loans to owner-occupier first-home buyers surged by 22 per cent.

The average amount borrowed by a first-home buyer rose in the latest ABS figures by to just shy of $320,000, while the average loan size for owner-occupiers fell to just over $396,000.

We expect credit conditions to tighten further over this year and, as a result, to see further weakness in house prices and building approvals

Lenders look set to continue seeking low-risk new customers to plug the gap left by investors, foreign buyers and interest-only borrowers.

Looking at our core area in more detail, it is unlikely that this will have a massive impact on pricing as a lot of our buyers are high net worth individuals with assets to underwrite their borrowing. If you would like to know more about the local market or the value of your home feel free to get in touch anytime.

Sourced from

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James Sutton

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