Small lenders to make a comeback

By Sam White, Loan Market Group Executive Chairman

There are a number of challenges facing the market in 2010 and foremost is the concentration of power within the big four banks. Last month Westpac hiked its standard variable lending rate by almost double the amount imposed by the RBA, raising it by 0.45 per cent to 6.76 per cent.

The Commonwealth Bank and ANZ also both hoisted their standard variable rates higher than the central bank's increase, while the National Australia Bank stayed in line with a 25 basis point rise.

Home owners have good reason to be concerned about where the RBA plans to take official rates. Some of the major banks arerefusing to guarantee their future rate rises won't exceed those implemented by the central bank. It's important forborrowers who are apprehensive about what 2010 may mean for their mortgagetospeak to aprofessional broker and research their options carefully.

A good mortgage broker will be able to givethem some background on how a particular lender has historically moved their rates outside of the Reserve Bank, which may assist in any decision-making. Mortgage holders also retain the right to negotiate a lower variable rate now on an existing home loan with their current lender; a mortgage broker can also assist with this process.