Home loan banks and providers market share in 2016

The big four banks have clawed back market share, but looking outside the majors could have serious benefits.

banks

The Reserve Bank has dealt two cash rate reductions in 2016 that saw the major banks withhold portions of the cut. Non-major lenders were potentially set to benefit, with the opportunity to cast themselves in contrast to the majors. But figures from Australian Finance Group (AFG) show major bank market share actually rose over the year. Nevertheless, for those borrowers bold enough to look outside the big four, big savings could be in store.

Number talk

In August 2016, the market share of the major banks and their subsidiaries was 72.2%. The figure was little changed from the previous year, when major bank market share sat at 72.8%. While the majors saw some brief dips that took their share of the home loan market as low as 66.5%, two cash rate cuts seem to have done little to erode their market power.

Where the non-majors are winning

The big four account for a significant majority of the Australian home loan market, but that doesn't mean they're winning every battle.

Figures from AFG show non-majors have increased their share of the refinancing market, from 31% to 36% over the June quarter. August's cash rate cut may not have eaten into big four banks' total overall market share, but it did spur borrowers to look for a better deal outside the majors.

If the top four banks continue to offer higher rates in comparison to their competitors, this downward trend could continue. With borrowers becoming more tech savvy and turning online to compare their alternatives, the dent in the big four’s refinancing market share could grow even more.

What this means for borrowers in 2016

This seemingly small refinancing shift is a sign of a home loan market bracing for increased competition, which is definitely good from a borrower’s point of view. If this pattern continues it could well translate into increased opportunities for borrowers taking out owner-occupied loans and investment home loans alike.

Borrowers now have the option to turn to websites like finder.com.au to compare offerings from most home loan providers in the country, regardless of whether they’re looking for a new loan or keen to switch from their existing home loan.

How comparing can help

An increasing number of Australians are turning to finder.com.au to compare loan offerings from multiple lenders because such comparisons tends to yield good results. The average standard variable rate in November 2016 of the top four banks stands at 5.25%. During the same period, the average standard variable rate amongst all lenders was just 4.73%

With more and more borrowers comparing their home loan options online, this is certainly going to put more pressure on the nation’s leading banks. Online comparisons are easy to do and for borrowers, can often result in lower rates and a much better home loan deal.

Comparison of Home Loans

Rates last updated March 1st, 2017
$
Loan purpose
Offset account
Loan type
Your filter criteria do not match any product
Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
loans.com.au Essentials - Variable (Owner Occupier, P&I)
A low-interest rate loan suited for purchases and refinances with no application or ongoing fees.
3.59% 3.61% $0 $0 p.a. 80% Go to site More info
HSBC Home Value Loan - Resident Owner Occupier only
Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR.
3.75% 3.77% $0 $0 p.a. 90% Go to site More info
Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier)
Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.
3.84% 4.22% $0 $395 p.a. 95% Go to site More info
State Custodians Standard Variable - LVR 80% (Owner Occupier)
Special Owner Occupier Rate. Free Offset Account.
3.69% 4.03% $0 $299 p.a. 80% Go to site More info
IMB Budget Home Loan - LVR <=90% (Owner Occupier)
A competitive budget rate without any unwanted bells and whistles.
3.87% 3.92% $445 $0 p.a. 90% Go to site More info
Beyond Bank Low Rate Special Home Loan
A special low variable rate for Owner Occupier with 100% offset account and no application or ongoing fees.
3.73% 3.73% $0 $0 p.a. 70% Go to site More info
loans.com.au Offset Variable - Up to 80% LVR (Owner Occupier P&I)
Take advantage a 100% offset account along with no annual or application fee.
3.67% 3.69% $0 $0 p.a. 80% Go to site More info
Switzer Home Loan
No upfront or ongoing fees and a competitive variable rate for owner occupiers.
3.89% 3.89% $0 $0 p.a. 90% Go to site More info
Auswide Bank Home Loan Plus with Freedom Package - Special Package Discount LVR <= 90% (Owner Occupier) P&I
A high maximum LVR home loan with redraw facility and additional payments.
3.79% 4.18% $0 $395 p.a. 90% Go to site More info

Marc Terrano

A passionate publisher who loves to tell a story. Learning and teaching personal finance is his main lot at finder.com.au. Talk to him to find out more about home loans.

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HSBC Home Value Loan - Resident Owner Occupier only

Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR.

loans.com.au Essentials - Variable (Owner Occupier, P&I)

A competitive interest rate home loan with interest only options. Interest rate 3.59%p.a.
comp rate of 3.61%p.a.

Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤85% ($150K+ Owner Occupier)

Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.

Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier)

Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.

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