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 December 9th, 2016
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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
HSBC Home Value Loan - Resident Owner Occupier only
Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR.
3.55% 3.57% $0 $0 p.a. 90% Go to site More info
3.74% 3.74% $0 $0 p.a. 80% Go to site More info
loans.com.au Essentials - New Purchases Only Up to 80% LVR (Owner Occupier, P&I)
Special offer ends 15 December. A low variable rate for new purchases as well as no application or ongoing fees.
3.39% 3.41% $0 $0 p.a. 80% Go to site More info
State Custodians Standard Variable Spring Special - LVR 80% (Owner Occupier)
Special Owner Occupier Rate. Free Offset Account.
3.59% 3.92% $0 $299 p.a. 80% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed ($150K+ Owner Occupier)
Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.
3.59% 4.42% $0 $375 p.a. 85% Go to site More info
ClickLoans The Online Home Loan - Owner Occupier ≤ 80% LVR
Enjoy a competitive interest rate when you have a deposit of at least 20%.
3.69% 3.69% $0 $0 p.a. 80% Go to site More info
loans.com.au Offset Variable - New Purchases Only Up to 80% LVR (Owner Occupier, P&I)
Special offer ends 15 December. No application or annual fees, and access to a 100% offset account.
3.49% 3.51% $0 $0 p.a. 80% Go to site More info
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier)
A fixed rate package loan with flexible repayments options. 250,000 Velocity Frequent Flyer point offer, conditions apply.
3.75% 4.87% $0 $395 p.a. 95% Go to site More info
Bank Australia Basic Home Loan - Variable (Owner Occupier)
A competitive variable that allows borrowers to borrow from a minimum of $100,000 and $0 ongoing fee.
3.59% 3.60% $0 $0 p.a. 80% 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.

ME Bank Basic Home Loan - LVR <=80% Owner Occupier

A low variable rate loan with no application or ongoing fees.

NAB Choice Package Home Loan - 3 Year Fixed (Owner Occupier)

Receive discounts on interest rates with the Choice Package. 250,000 Velocity Frequent Flyer point offer, conditions apply.

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