The country’s largest banks are quietly offering their back book a 1 percentage point discount to prevent existing customers from switching lenders amid a surge in competition and as $350 billion in mortgages roll off ultra-low fixed rates this year.

The discounts – some $5000 for an average mortgage – come as banks roll out promotional offers for new borrowers including free NBN and up-front cash, and are made to customers whose brokers are calling up lenders to seek a better deal.