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The price war between Australia’s lenders looks like it has finally run its course, one industry stakeholder has claimed.
Speaking at the Connective conference on the Gold Coast last week, Connective principal Mark Haron said while the fierce battle for market share will continue, lenders were starting to dial back competition when it comes to interest rates.
“I don’t think we will continue to see the dramatic rate reductions we have seen over the past few months,” he said.
“Rates are beginning to settle down and that is a good thing for the industry as a whole.”
According to Mr Haron, lenders were eroding their margins by cutting rates, which ultimately puts broker commissions in danger.
“As lenders compete for market share they cut their rates, which means they are writing loans at narrow margins.
“As they decrease their margins, they would look to recover costs in other ways – which could mean broker commissions were under threat,” he said.
Moving forward, Mr Haron said the industry was unlikely to see any further reductions to broker commissions.
“We have actually seen broker commissions increase recently, which is a positive sign for the future.”
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