Low rates set to spark new mortgage war

Low European interest rates are allowing Australian banks to borrow funds cheaply at the moment.

Experts say banks will either add to their profit margins or deliver cheaper rates for Australian borrowers.

The cheap funding is expected to drive new competition in the home loan market.

Currently standard variable rates range from below five per cent to over 6 per cent per annum.

Fixed rate mortgages are currently the subject of a price war, with many recent rate cuts delivering good value to borrowers. Fixed rate mortgage rates are currently ranging between 4.5 per cent and 6.5 per cent.

Source: Bankheadlines.com.au