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Brokers may be running out of time to capitalise on the ongoing spate of rate cuts, which has now seen variable rates fall to 4.48 per cent.
Nobody is sure how much further rates can fall, after loans.com.au undercut fellow online lender Ubank earlier this week by reducing its variable rate from 4.54 to 4.48 per cent.
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Lenders have been cutting rates throughout 2014. In the past seven weeks alone, there have been cuts from Adelaide Bank, Suncorp Bank, Bankwest, Advantedge Financial Services, Bank of Melbourne, Wide Bay Australia and Homeloans.
Firstmac and loans.com.au owner Kim Cannon said fierce competition has been driving the price cutting, but that he was unsure if variable rates could fall any further.
"A couple of months ago, I thought rates had bottomed. So let's wait and see – it's all impacted by what goes on in the world," he told The Adviser.
Troy Phillips, co-founder of wholesale funder MAS, said banks have been under pressure to maintain portfolio growth to impress the analysts and the market.
"They want to keep their market share, they want to keep their portfolio growth going, and the only solution they have at the moment is price," he said.
Mr Phillips said variable rates were almost certainly at or near the bottom, and that it would be hard to imagine a lender having enough margin to drop rates below 4.45 per cent.
"Retention is key. When your margins are so fine, you've got to keep the customer. If you're attracting people who are shopping rates, what sort of customer are they?" he said.
"It's great for the broker and the customer, but there are other metrics they [banks] need to focus on. You work so hard and pay so much to get a customer these days."
Financing Property chief executive Peter Gwynne said the rate cuts won't last forever, so brokers need to take advantage of the current environment when marketing to their clients.
Mr Gwynne said the Gold Coast brokerage never fails to generate new business when it sends out email blasts to alert new clients about rate cuts.
"Normally when you get a new deal, you give them the best deal, so it's more about existing clients and seeing how we can save them money," he told The Adviser.
"It's a great time to negotiate a new deal. There are a lot of clients that have been with loans for a number of years, so it could be worth reviewing them and bringing them down to a better deal."
