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Yellow Brick Road has taken a swipe at discounting by the major banks after announcing its own rate cut.
The group has reduced its Rate Smasher home loan to 4.68 per cent, which it said was “the lowest variable rate home loan available from a branch-based financial institution”.
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Chief executive Matt Lawler said the discount rates that banks had been offering to attract new business were “detrimental” to clients.
Mr Lawler said borrowers who took out a typical $400,000 home loan from a major bank could get an average variable rate of 5.14 per cent once the discount was applied.
However, he said that comparison website finder.com.au had found 65 variable loans below this rate.
“According to research commissioned from finder.com.au, Australians are potentially wasting $40,000 over their loan term by signing up for these discount promotions,” he said.
“Like many lenders, the big four banks offer a discounted rate off their standard variable rate if borrowers sign up to a package, which often includes a home loan plus other products such as a transaction account, savings account or credit card.”
