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Non-bank lenders and second tier banks are seeking to win greater consumer business with reductions to their fixed rate home loans.
Aussie Home Loans announced a challenge to the big banks today with the reduction of its three year fixed rate home loans to below seven per cent.
Effective tomorrow, Aussie’s three year fixed rate will fall by 0.35 per cent to 6.99 per cent.
According to Aussie the move will make Aussie’s three year fixed home loans the lowest in the market as well as below the average of the big four banks’ standard variable rates.
Aussie CEO Stephen Porges said home owners were very concerned about what would happen to interest rates after the election this weekend.
“Our price cut will reinvigorate much needed competition in the home loan market,” he said.
Aussie’s move follows National Mortgage Company and ING DIRECT who both moved on fixed rates last week.
National Mortgage Company moved to reduce its fixed rates on Thursday with its two and three year home loans now sitting at 7.60 per cent.
ING DIRECT, who has announced aggressive plans to stimulate market competition, also reduced its fixed rates last Monday. Its two and three year fixed rates now stand at a competitive 7.09 per cent.