NATIONAL Australia Bank has ignited a new bank war with a $1000 cash-back offer for home loan customers who switch bank.
In an aggressive push aimed at stealing market share, NAB will today launch a major spring home loan campaign to coincide with the upswing in home sales.
The fall in the official interest rates to a 53-year low of 2.5 per cent last week and close to record low bank mortgage rates in the marketplace are widely tipped to fire up the housing market over coming months.
Clearance rates were back about the 70 per cent mark this weekend.
In a note to senior staff, NAB's group executive for personal banking, Gavin Slater, said this new offer would build on the "break-up campaign" launched on Valentine's Day 2011 and the bank's four-year long offering of the lowest standard variable rate.
"This is a deliberately aggressive and market-leading offer by NAB to win customers from our rivals and drive competition," Mr Slater told senior executives in a memo.
"Spring is our key home loan season and this campaign, and these offers, area great opportunity for NAB to win more market share from our competitors, close out a strong year and build momentum into financial year 2014."
The big four banks control almost 85 per cent of the $1.17 trillion home loan market, according to the Australian Prudential Regulators most recent report.
NAB is hoping this campaign will lift its 17 per cent of the market and provide a significant increase to its $197 billion home loan book.
Home loans are a key profit centre of banks' business models. All of the majors passed on last week's Reserve Bank rate cut of 25 basis points in full to customers.
Most economists are tipping the RBA will be forced to lower official interest rates again later this year and possibly early next year as the economy slows.
stephen.mcmahon@news.com.au
