These are interesting times for home owners and property investors with 3 lenders dropping their variable borrowing interest rates even though the RBA held rates steady.
The three lenders were:
– IMB cut one home loan by 0.05 percentage points
– BMC Mortgage cut several loans by 0.10 percentage points
– Holiday Coast Credit Union cut several loans by 0.20 percentage points.
Michelle Hutchison, Spokesperson for RateCity, said it’s the first time RateCity recorded three lenders cut variable home loan rates out-of-cycle.
”While there have been several rate increases out-of-cycle, we’ve never seen lenders drop variable home loan rates while the cash rate remains stable.
“Lenders have room to move after keeping on average 0.42 percentage points of the Reserve Bank’s 1.75 percentage point cut to the cash rate since November 2011 from variable home loan borrowers. If these three lenders can afford to cut variable rates out-of-cycle, other lenders – including the major banks – have no excuse to sit on their hands.”
Mrs Hutchison said borrowers need to take control of their home loan instead of waiting for a discount from their lender.
”This is the start of something extraordinary as it’s likely to shake up the home loan market. It opens the door for borrowers to expect better deals and more discounts without needing to wait for the Reserve Bank to lower the cash rate.
“But it will be up to borrowers to keep your lender in line with the competition: find out what interest rate you’re paying, compare your home loan to the rest of the market at RateCity.com.au, and demand a discount from your lender or switch to a better deal.
“A 0.20 percentage point discount can go a long way. For instance, for a $300,000 home loan dropping from 5.9 percent to 5.7 percent could mean a saving of $456 per year or $13,680 over 30 years, just by asking for a discount.”
We’ll be discussing finance, interest rates and much more at my upcoming National Property & Economic Market Updates around Australia in the next few weeks. Click on the graphic below and find out ore and reserve your place