Margins Getting Tighter

When one lender is offering 3-year fixed home loans for under 6%, and another is offering 3-year term deposits for over 6%, you can have confidence that their margins are historically tight, and that genuine competition is back.  That’s good news for consumers, but not necessarily for businesses.

Interest rates for asset finance and business loans have been in a slow downtrend in line with bank bills, which dropped this week by 20 points in response to the RBA’s cut of 25.  Margins, however, remain at about 3%.

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