Mortgage calculator to help consumers beat the banks

“The ACCC is working with the Council of Financial Regulators to develop options for implementing this recommendation,” the ACCC said.

The move was flagged in a public statement Thursday by the CFR, which said it “strongly supports improving mortgage interest rate transparency and that a working group is looking at a number of options.” .

This follows a damning report from the competition regulator this week on opaque mortgage pricing and the market power of big banks.

The big four banks used the cover of regulatory intervention to raise rates on interest-only loans and extract an additional $1 billion in profits, the ACCC found.

An online calculator recommended by the Productivity Commission to compare home loan interest rates and bring more transparency to the mortgage market is actively under development.

The ACCC concluded that a lack of transparency stifles competition in the mortgage market.

Compare interest rates

The government and the ACCC also believe that rules on consumer data rights under open banking will make it easier for consumers to compare interest rates.

The rules will give consumers the right to secure access to data about them held by companies and will direct that such information be transferred to trusted and accredited third parties of their choice.

“This will improve consumer access to competitive offers and new and innovative services. For example, it will facilitate the ability to compare and switch between products and services, including residential mortgages,” said the ACCC.

Frydenberg said the government is committed to increasing competition and improving consumer outcomes in banking.

“This includes improving the transparency of the residential mortgage market,” he said.

“Our open banking reforms will revolutionize consumers’ ability to seek out a better deal.”

Major banks are reviewing the terms and pricing of thousands of financial products, to standardize definitions and interest rates across the industry to enable them to be reported in the government’s open banking regime and be easily compared by customers.

The new technology that will determine the extent of banking competition in the market over the next few decades will be finalized in the coming months. Data61 is taking comments on its new open banking standards for another fortnight as the ACCC, the scheme’s main regulator, prepares to publish an updated version of the rules in December.

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