By
Variable borrowers are being urged to make 2013 the year to save more on their home loans, following announcements that at least three lenders have cut variable interest rates out-of-cycle – but one of those lenders warns, ‘not so fast’.
Michelle Hutchison, spokesperson for financial comparison site RateCity, says it's the first time the site has 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 an average 0.42 percentage points of the RBA’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.”
#pb# However, IMB national manager, third party sales, George Sotiros, tells Australian Broker comments like these are jumping the gun.
“When they’re talking about moving out of cycle – I’m not aware of anyone who’s made a sweeping cut across their entire portfolio. When it happens, it’ll be great, but at this point I don’t think anyone’s doing anything too exciting just yet.”
Sotiros adds that IMB’s offer of a 0.05 percentage point reduction only applies to one product and is not available through the broker channel.
BMC Mortgage and Holiday Coast Credit Union similarly cut rates on several of their products, by 0.10 percentage points and 0.20 percentage points respectively.
Hutchison remains positive, however, saying 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.”
