Interest rates: Loan discounts disappear as banks like Westpac, ANZ, NAB and CBA reach mortgage war ceasefire

Reserve Bank data shows lenders in August were offering an average variable home loan rate of 5.99 per cent, only 0.2 percentage points less than the average 6.2 per cent rate paid by existing borrowers.

It led to a surge in competition, but AMP chief economist Shane Oliver said the major banks now faced pressure from shareholders to deliver higher and more sustainable returns.“The benefits in terms of volume were being swamped by the deterioration in their interest margin,” Dr Oliver toldThe decline in mortgage discounting has not been limited to owner-occupiers. New variable-rate investor loans in August had an average rate of 6.28 per cent, just 0.

Chief executive Matt Comyn, however, downplayed those prospects at CBA’s annual shareholder meeting in Sydney this week.

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