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Banks to end mortgage discounts

29/06/2010

ANZ's Australian chief executive, Phil Chronican, said major banks could end discounts on mortgage rates offered to customers to soften the impact of increased wholesale funding costs. Chronican said banks were already beginning to make changes to mortgage packages, particularly reducing brokerage fees, to ease the current margin squeeze.

Chronican said it was likely the local banks would restructure the "value-based pricing" of mortgages, which could include reducing the discounts on the average standard variable rates offered to some new and existing customers. "The banks offer discounts based on the valuation characteristics of a loan. In the future we may see that being used differently by banks as they fine tune their home loans," Chronican said.

Source: The Australian



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