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Lenders were poised to provide some relief to home loan customers out of cycle, regardless of the RBA taking its cash rate to a record low, according to 1300HomeLoan managing director, John Kolenda.
Kolenda says he was delighted to see the RBA drop its official rate 25 basis points to 2.75% at its May board meeting in response to weak economic conditions, arguing that confidence remains subdued and consumers along with many struggling businesses are expecting further rate cuts after ‘inaction’ from the RBA since December, 2012.
However, he says even if the RBA had stayed on the sidelines, lenders themselves were likely to deliver good news to consumers, as there were ‘increasingly clear signs’ banks were gearing up to compete more strongly for market share.
"Lower than expected growth in the home loan market has seen negative loan book growth for some lenders and we believe banks would have reduced mortgage rates independently of the RBA anyway as they look to increase business," he says.
Kolenda further urges mortgage holders to consult a broker to have their home loan checked and to ensure they are getting the most competitive interest rate.
"I wouldn't stand by and wait to see if lenders drop their rates in line with the RBA. Whether the lenders openly drop their interest rates or not, consumers should be asking for lower rates. You might be surprised at the response you get."
