Over the past week, all four of Australia’s biggest banks have reported falls of between 12% to 20% in new home loan applications since the May federal budget.

After announcing it would keep interest rates on hold, the Reserve Bank confirmed demand for new home loans has “declined noticeably”.

For anyone currently in the market for a new or refinanced home loan, that’s good to know – because banks are now competing even harder to win customers.

The big four’s dominance is waning

Since the start of June, at least 31 smaller lenders – though not yet the biggest four – have begun offering slightly lower variable home loan rates for new customers.

One of them is Macquarie Bank. It’s grown its share of Australia’s mortgage market from just 0.19% in 2010 to now being the fifth-largest home loan lender, with 7.33% of home loans by June this year.

That’s still far less than “the big four” had in June this year:

Commonwealth Bank, with 25.36% of home loans, the only major bank to maintain its market share since 2010 (when it had 25.27%)

Commonwealth Bank, with 25.36% of home loans, the only major bank to maintain its market share since 2010 (when it had 25.27%)

Westpac on 20.66% (down from 26.84% in 2010)

Westpac on 20.66% (down from 26.84% in 2010)

NAB’s 14.03% (down from 15.68% in 2010)

NAB’s 14.03% (down from 15.68% in 2010)

and ANZ’s 13.21% (down from 15.31% in 2010).

and ANZ’s 13.21% (down from 15.31% in 2010).

But the direction of change has been striking. In the........

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