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ISCOVER
Staff Reporter
Fading lender competition is having a negative impact on product pricing, one industry stakeholder has claimed.
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Speaking at a media function in Sydney yesterday, Mortgage Choice chief executive officer Michael Russell said intense competition between lenders is crucial to the ongoing success of the third party channel and borrower activity.
"As competition shrinks, the margin between the cash rate and the average standard variable rate increases," he said.
"When lender competition was at its peak, just one per cent separated the official cash rate from the standard home loan rate.
"But, as competition dwindles, this is no longer the case."
"Borrowers are hesitant to buy at the moment. They are waiting for rates to come down and property prices to fall. They might not be as hesitant if there were more lenders to choose from."
Mr Russell said the corporate regulator should not be allowed to sit back and watch as competition between lenders is eroded.
