The days of banks discounting home loan rates for new customers appear to be dwindling as the big four banks pull the trigger on out-of-cycle hikes.
After months of cutting rates on select products to entice new customers from competitors, the trend appears to be reversing since the last 0.25 percentage point boost to the official cash rate in March.
Commonwealth Bank, Australia's biggest bank, increased the new customer rates on its package variable home loan on Friday for the second time in two weeks.
This followed hikes on new customer variable rates by Westpac earlier in the week, and comparable moves by NAB and ANZ last month.
Canstar finance expert Steve Mickenbecker said banks had been double dipping across lowest-priced loans previously discounted to entice new customers looking to refinance.
"Over the past year, the gap between the average interest rate for new loans and existing loans has widened by 0.32 per cent," he told AAP.
"The March and April out-of-cycle increases for new borrowing are winding back this gap a little."
Mr Mickenbecker said offering low rates to new customers might have weighed on bank margins and weakened returns.
"There have been suggestions from bank executives that discounted rates for new borrowers were stressing bank interest margins, and it looks as if this is starting to be reflected in recent rate moves," he said.
RateCity research director Sally Tindall agreed it was becoming too expensive for banks to hand out discounts on such a large scale.
"After 10 cash rate hikes and steep increases to wholesale funding globally, the big banks are now quietly slipping their biggest discounts off the table," she said.
Ms Tindall said some lenders, particularly the smaller ones, were starting to cut their fixed rates.
She said 16 lenders had slashed fixed rates in the past fortnight while eight had hiked rates.
