BANK ON IT

Business First - - NEWS -

One of Aus­tralia’s big­gest com­par­i­son web­sites finder.com.au is urg­ing Aus­tralians to take ad­van­tage of the grow­ing com­pe­ti­tion be­tween fi­nan­cial in­sti­tu­tions while they bat­tle it out for mar­ket share, fol­low­ing the Re­serve Banks’ decision to leave the cash rate un­changed at 2.50%.

The Survey found that the majority of ex­perts are bet­ting on in­ter­est rates to start ris­ing next year, with the cash rate to con­tinue to a “new nor­mal” level of 4 per cent.

Michelle Hutchi­son, Money Ex­pert at finder.com.au said that fi­nan­cial in­sti­tu­tions will con­tinue to com­pete for mar­ket share, de­spite rate hikes on the hori­zon.

“Our re­search shows that the power shift be­tween the banks over the past fi­nan­cial year has re­sulted in more com­pe­ti­tion, par­tic­u­lar- ly for lend­ing prod­ucts like home loans and credit cards.

“We found that the big four banks lost mar­ket share by 1 per­cent­age point for owner-oc­cu­pied home loans, while gain­ing 1 per­cent­age point mar­ket share for per­sonal credit cards.

“With home loan rates con­tin­u­ing to fall over the past year and more credit card bal­ance trans­fer deals than we’ve ever seen, now is a great time to take ad­van­tage of the of­fers avail­able be­fore rates start to rise,” said Mrs Hutchi­son.

Ac­cord­ing to a finder.com.au anal­y­sis of Aus­tralian Pru­den­tial Reg­u­la­tion Au­thor­ity (APRA) data, the big four banks lost 1 per­cent­age point of mar­ket share for owner-oc­cu­pied home loans since July 2013, mak­ing up 84 per cent out of all banks in June 2014, worth $696.6 bil­lion.

On the flip side, the big four banks gained 1 per­cent­age point in mar­ket share for per­sonal credit cards, sit­ting at 84 per cent, worth over $34 bil­lion. The in­crease in mar­ket share could be at­trib­uted to more ag­gres­sive pric­ing for pro­mo­tional of­fers such as bal­ance trans­fers, with ANZ for in­stance, now of­fer­ing 0 per cent bal­ance trans­fer deals for up to 16 months.

“While the cash rate might re­main on hold for now, it’s likely to start in­creas­ing next year. And with fi­nan­cial in­sti­tu­tions com­pet­ing harder for your business, it’s worth keep­ing track of your bank­ing prod­ucts and make sure you’re get­ting a good value deal. It can make a big dif­fer­ence to your bud­get once in­ter­est rates rise.”

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