Australian mortgage lender AMP has cut down interest rates in a sign that mortgage borrowers are taking advantage of the competition in the mortgage market.
AMP is reducing its basic mortgage rate by 10 percentage points to 6.24 percent for first-time homebuyers, and is "hopeful we will be further able to reduce our rates," said AMP in a report.
Sources said that the company’s move is a good sign that the global financial crisis has not allowed major banks to monopolise the mortgage market or wipe out smaller lenders.
Furthermore, it was noted that the Australian government is currently considering several plans to make it easier for Australians to switch lenders or compare home loans.
"This reduction in interest rates has only been possible because of the improvement to the securitisation markets flowing on from the government’s support," said Craig Dunn, managing director of AMP.
AMP’s announcement supports the findings of a report released earlier this month, which claimed that several smaller lenders are set to take on the major banks in the mortgage market this year.