Juicy cuts on the way? More lenders beginning to reduce rates
There’s been a lot of noise in the home lending and financial space recently, so there’s every chance you may have missed it, but some lenders are starting to cut rates.
The RBA may have kept rates on hold for 30 consecutive months, but that hasn’t stopped lenders from making cuts (or increases) on their own accord.
Bendigo Bank is the latest bank to make a downward move, cutting its interest rates by as much as 0.20 percentage points for new borrowers across a range of its products, while rates for existing borrowers remain unchanged.
Other lenders have also made moves
Bendigo is by no means the only lender cutting rates. In fact, it’s the eighth or ninth lender to make variable cuts this year.
Other lenders that have made cuts include Heritage Bank, Bankwest and State Custodians.
The move comes after RBA governor Phil Lowe recently indicated there’s now a 50/50 chance that the next official cash rate move could be down, despite most pundits previously predicting it would be up.
That said, 14 to 15 lenders have recently increased the variable rate on loans for existing customers, including NAB, Macquarie and ING.
So, what does this all mean?
Well, with so much movement and uncertainty in the market, it might be a good time to give us a call for a home loan health check.
We’d be more than happy to look at your current home loan to make sure it’s still appropriate to your needs – or whether the market has shifted enough for you to start considering other options.
Meanwhile, Treasury warns against damaging competition
In other news, Treasury Secretary Philip Gaetjens has highlighted the important role that mortgage brokers play in promoting competition in the home lending sector.
He’s warned the government and Labor not to damage competition, which could happen if they adopt a banking royal commission recommendation to change the broker remuneration structure to a user-pays model.
“One issue, in particular, where Treasury did express a strong opinion was in relation to the role of mortgage brokers in promoting competition,” Mr Gaetjens told a Senate Estimates committee on Wednesday.
“As governments of all persuasions have recognised, it is important that care be taken to not damage – and where possible, to enhance – competition in the banking sector.”
Queensland-based lender Heritage Bank has also publicly defended broker commissions.
“We do not support increasing the costs for customers to obtain a home loan in the form of a customer-paid fee for service and worsen the current affordability crisis for those customers already struggling to afford a home,” says Heritage Bank CEO Peter Lock, whose comments echo those made by several other non-major lenders, including P&N Bank and ING.
“A major contraction of the mortgage broking industry would reduce competition and put the big banks in an even more powerful position in the home loan market.”
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