Major Bank Drops Rates More Than RBA
For the first time in years a major bank has dropped its variable interest rate more than the than Reserve Bank interest rate cut, a move that’s likely to create heightened competition and savings for consumers.
Loan Market spokesperson Paul Smith said the move by one of the major banks, which dropped its standard variable rate 27 basis points after the RBA dropped 25 basis points on Tuesday, was a massive win for consumers.
“This move is going to heat up the competition between lenders who will have to offer similar rate cuts to retain and attract customers,” he said.
“Consumers have been calling for interest rate reductions instep with RBA cash movements for years and it appears lenders are finally in a position to give back more to consumers,” he said.
“Passing on 27 basis points will save customers on a $300k mortgage over $50 a month in their repayments. These are saving that will help many households.”
Mr Smith said that cost-of-funding pressures had kept many of the major banks from passing on the interest rate cuts from 2012 and this move is a clear signal those pressures have subsided.
“There have been talks of costs-of-funding pressures easing for some time now and this is the clearest sign we’ve seen of this.”
Mr Smith said the services of a mortgage broker would be very useful for any customers looking at switching home loans because they could negotiate better rates between lenders, including their existing bank.
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