Media Release

Competition builds but borrowers still flocking for a discount

  • 7 lenders dropped 20 variable home loans by as much as 0.17 percentage points
  • While major four banks increase home loan market share
  • Borrowers with a $400,000 home loan could be paying extra $40,000 in interest

April 29, 2014, SYDNEY – Despite seven lenders reducing their variable home loans out of cycle this year, One of Australia’s biggest comparison websites is warning borrowers to be careful of discounted interest rates.

According to, seven lenders have dropped variable interest rates on 20 home loans by as much as 0.17 percent since January 1, 2014. The most recent lender to reduce a variable home loan rate out of cycle is Yellow Brick Road, which dropped its Rate Smasher Home Loan by 0.05 percentage points to 4.68 percent. Others include ANZ, Bank of Queensland, Citibank, Homeloans, HSBC and Westpac.

While competition is increasing between lenders, the big four banks – ANZ, Commonwealth Bank, NAB and Westpac – increased their home loan market share.

According to Australian Prudential Regulation Authority data analysed by, the big four's combined market share has increased to 84 percent in February 2014, from 81 percent in February 2013.

Michelle Hutchison, Money Expert at said borrowers could be missing out on potentially thousands of dollars by not comparing home loans and falling for a discounted interest rate.

"It's extremely important for borrowers to compare home loan deals, read between the lines, and be wary of discounted home loan rates.

"Some lenders, including the major banks, market their home loans based on a discount off their standard variable rate. But the rate you end up with could be much more than other home loans in the market.

"For example, the big four banks offer their package variable home loans for a $400,000 loan as 0.77 percentage points on average off their standard variable rates. The actual rate that borrowers are offered for this loan size is 5.14 percent on average.

"There are 65 variable home loans in the database that are lower than the big four banks' average discounted rate for this loan size. Compared to the average variable rate of the top four home loans on of 4.64 percent, borrowers with a $400,000 home loan could save$122 per month or $43,920 over their 30-year loan term."

Mark Bouris, Executive Chairman of Yellow Brick Road, said that it’s vital for people to take control and do their research before settling on a home loan.

“People visit their bank thinking their loyalty is going to get them the best home loan rate, or they’re attracted to a special offer, oblivious to the fact that the discount rate might not be competitive in the long run. Shopping around and comparing rates can easily save a home owner tens of thousands of dollars over the life of their loan, and that’s money better spent planning for the future than in interest payments.”'s top variable home loans:

LenderInterest rate Dream Home Loan4.49%
UBank UHomeLoan4.62%
Yellow Brick Road Rate Smasher Home Loan4.68%
HSBC Home Value Loan4.75%

source:, ranked by lowest advertised ongoing variable interest rate

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The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on's review pages for the current correct values.

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