Hi Property Lovers
I came across this article today. Finally a bank willing to start a competitive mortgage market. This was a good read:
A NEW price war is set to erupt across Australia's $860 billion home lending market, with Commonwealth Bank owned-BankWest to launch a new mortgage product that will have an interest rate cap until late 2012.
It is understood the bank will launch the new home lending product tomorrow. The Australian understands it be based on a discounted standard variable interest rate, but capped at 7.5 per cent until late 2012.
That means that even if the standard variable rate hits 10 per cent during that period, the interest rate on the loan cannot go higher than 7.5 per cent. It is understood the discounted standard variable rate will be priced at 5.4 per cent, 30 basis points below BankWest's current interest rate of 5.7per cent.
The four major banks have a standard variable rate priced between 5.74 and 5.81 per cent.
A spokesman for BankWest yesterday confirmed the bank was putting the finishing touches on a "highly innovative product".
This reinforces "our commitment to challenging the market by rolling out new and innovative products," the spokesman said. "We will obviously remain aggressively competitive."
Last October, CBA spent $2.1 billion for the former HBOS subsidiary BankWest.
The timing of the BankWest mortgage offer comes amid market expectations that interest rates will rise.
Economists are predicting the Reserve Bank could move to lift the official cash rate -- currently at 3 per cent - as early as next month.
A spokeswoman for Westpac said the bank was months away from releasing its suite of home loan products, but "we are going down the path of simplification, rather than more bells and whistles."
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