Dec 11 (Reuters) - Australia's competition regulator on Tuesday said opaque, discretionary pricing of residential mortgages by banks makes it difficult and time-consuming for borrowers to shop around, stifling price competition.
The Australian Competition & Consumer Commission said in its Residential Mortgage Price Inquiry report that "unnecessarily high search costs or effort" to find better prices reduces borrowers' willingness to shop around.
Those ready to negotiate could land a better deal, but might be unaware about such options, it added.
"Pricing for mortgages is opaque and the big four banks have a lot of discretion. The banks profit from this and it is against their interests to make pricing transparent," ACCC Chair Rod Sims said in a statement.
The report monitored prices charged by the five banks covered by the government's Major Bank Levy between May 9, 2017 and June 30, 2018. These were Australia and New Zealand Banking Group Ltd (ANZ) , Commonwealth Bank of Australia (CBA) , Macquarie Bank Ltd, National Australia Bank Ltd (NAB) , and Westpac Banking Corp (WBC) .
A year-long quasi judicial Royal Commission inquiry ended last month, exposing widespread wrongdoing in Australia's financial industry. It will submit its final report by Feb. 1.
News: WBC Australian watchdog says opaque residential mortgage pricing stifles competition
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