So the big banks have the market all to themselves

Pretty much, yes — and it's not an accident.

In Australia, the "Big Four" dominate

CBA, Westpac, NAB and ANZ between them hold roughly 75-80% of all mortgages in Australia. That level of market concentration is extraordinary compared to most other developed countries.

How did they get there?

A few reasons:

Regulatory capture — the big banks have enormous lobbying power. They have direct relationships with politicians and regulators and have historically influenced policy in their favour. APRA (the banking regulator) is responsible for keeping them in check, but critics argue it's too cosy with the institutions it regulates.

The "too big to fail" advantage — during the 2008 global financial crisis, the Australian government guaranteed all bank deposits. This implicit government backing means the big four can borrow money more cheaply than smaller competitors because investors know the government won't let them collapse. That's a massive structural advantage that smaller lenders simply don't have.

Barriers to entry — starting a bank is extraordinarily difficult and expensive. You need an Australian Banking Licence, massive capital reserves, complex compliance infrastructure and technology systems. This keeps serious competition out.

They bought the competition — over decades, the big four systematically acquired smaller banks and building societies that might have competed with them. CBA bought Bank West, Westpac bought St George and Bank of Melbourne, ANZ and NAB swallowed numerous regional banks. The regulators largely waved these mergers through.

What about smaller lenders?

There are alternatives — credit unions, mutual banks like Teacher's Mutual, and online lenders like Athena and Tic:Toc. They often offer better rates and more customer friendly terms. But they lack the branch networks, brand recognition and marketing budgets of the big four so most people never seriously consider them.

The Royal Commission

In 2018, the Banking Royal Commission led by Kenneth Hayne exposed widespread misconduct across the big four — charging fees for no service, lending irresponsibly, misleading customers and regulators. The findings were damning. There were fines and some executive resignations, but critics argue the consequences were nowhere near severe enough given the scale of the misconduct.

The irony

The big four are consistently among the most profitable banks in the entire world relative to their size. Australian mortgage holders pay some of the highest rates relative to the cash rate of any developed nation. The connection between those two facts is not a coincidence.

So to directly answer your question — yes, the big banks effectively have the market to themselves, it was deliberately engineered that way over many decades, and Australian homeowners pay the price for it every single month.

There is nothing as a ordinary citizen that can do to have a fairer way to own your own home.

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