The big four have more room to move on home loan rates than their non-major rivals, according to the RBA.
Benn Robertson and Anthony Rush of the RBA's domestic markets department, said a tougher funding environment exists for non-major banks compared with the big four, despite the fact overall funding costs have dropped across the sector along with falling interest rates.
"For the regional banks, the evidence suggests that the overall increase in funding costs since the onset of the GFC has been larger than the increase in funding costs experienced by the major banks
""A large portion of this increase has been driven by the substantial shift in the composition of regional banks 'funding liabilities away from securitisation and towards relatively more expensive deposit funding, as well as an increase in the cost of their deposits and wholesale debt funding" they said.
Liz's opinion - "Major banks have been more consistent on their package discounts and unadvertised pricing concessions than non-majors. We take this into account as a loan term is 25-30 years, so we don't just opt for the 'flavour of the month' lender.