Banks battle for borrowers
This week saw ASB become the last of big four to move its one year rate back above the 4%
mark, ending the symbolic but short-lived price war.
New Zealand borrowers have enjoyed record low rates for some time, and the Reserve Bank
will keep the OCR where it is until 2020. Yet sub-4% rates are seen only once in a generation,
and mortgage experts don’t think they will back any time soon [link to story:
https://tmmonline.nz/article/976514055/sub-4-rates-unlikely-to-return].
As one adviser told us this week, sub-4% is “unsustainable”. Experts say sub-4% rates show
banks are desperate to grab the limited pool of prime customers out there. The shallow pool is
of the banks’ own making, as customers struggle to pass servicing and income tests. Do you
expect more fierce competition for prime borrowers next year? How will it play out? Let us know
what you think here [link to my email add].
Earlier this week, Newpark Home Loans revealed more about its plan to shake-up the dealer
group market. The recently-formed group charges per brokerage, rather than per individual. It
believes the fee model will give it the edge. Newpark says its model makes it easier for smaller
brokerages to bring in additional advisers. It believes small brokerages are burdened by the
individual fee model and should not have to pay extra fees as they grow.
Do you agree with Newpark? Will their model be a success? Tell us what you think.