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Home loan rates tumble despite RBA’s inaction
Ahead of the RBA’s announcement of Australia’s official cash rate, new research has found that the major four banks are reducing the cost of credit to consumers.
Home loan rates tumble despite RBA’s inaction
Ahead of the RBA’s announcement of Australia’s official cash rate, new research has found that the major four banks are reducing the cost of credit to consumers.
Data released by Rate City shows the big four banks, which together hold nearly three in four home loans, have shaved their lowest variable rate by an average of 0.25 per cent in the last six months for new customers, despite the RBA holding rates.
In total, the research showed that since 19 March, 90 lenders have reduced their variable interest rate on at least one product they were offering to consumers.
Rate City’s research director, Sally Tindall, said a record number of people have refinanced in the last six months to take advantage of the low rates on offer; however, there are still hundreds of thousands of home owners overpaying on their mortgage.
“The average existing owner-occupier is on a rate of 3.22 per cent. That’s 0.65 per cent higher than what the big four banks are on average offering new customers for a basic variable loan,” she said.
While pointing out the big four have reduced their rates, Ms Tindall said mortgage-holders that shop around can get a better rate.
“There are 12 lenders now offering home loans below 2 per cent, and the list is growing by the week,” she said.
“At a time when every dollar counts, a rate cut of 0.15 per cent would save the average mortgage holder $33 a month.”
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