Auswide Bank to offer tracker mortgages

Font size :
Queensland’s Auswide Bank has defied the Big Four by recently announcing it will begin offering tracker mortgages to clients. Executives from Auswide Bank said they believe they’re the first lender to offer them in Australia.  

Tracker mortgages—which are variable-rate home loans with interest rates that rise or fall in line with a benchmark rate—could potentially help millions of Australian homeowners who suffer because the Big Four refuse to pass on Reserve Bank of Australia (RBA) rate cuts.    

During the recent parliamentary bank inquiry set up by Prime Minister Malcolm Turnbull, banks resisted Liberal MP David Coleman’s calls to introduce them to the Aussie market. Banks said tracker mortgages could be risky in tough financial times, and banks would have to price them at rates consumers would not find competitive.

Brian Hartzer, chief executive officer of Westpac, strongly warned against the introduction of tracker mortgages, saying they were a major factor in the collapse of Northern Rock during the global financial crisis. Hartzer also warned that banks would have to charge a major premium to manage risk, which may make them too expensive.

Other prominent executives who’ve voiced their disapproval of tracker mortgages include Andrew Thorburn, group chief executive officer of NAB, and Wayne Byres, chairman of APRA.  

Tracker mortgages also have their staunch defenders. Last Wednesday, ASIC chairman Greg Medcraft slammed the major banks, saying they operated as “an oligopoly”. According to Medcraft, tracker mortgages would lead to more competition and end the confusion and lack of transparency in the domestic home loan market.  

Auswide Bank will offer the loan at a variable interest rate of 3.99% (the comparison rate being 4.01%), and pledges to change the rate effective within two working days after an RBA cash rate change. Moreover, if the cash rate falls to zero percent, “the customer will continue to pay the fixed margin”. 

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Sunday, Sep 24, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords