Home Loan Interest Rates – Banks Slow to Pass On Cut

Having been in the mortgage industry for just over 6 years I have seen home loan interest rates rise and fall. One of the most common observations is that banks are slower to pass on a rate cut compared to when interest rates rise.

The table below shows that there is a 24 day difference between banks passing on the interest rate cut. Commonwealth Bank was the quickest to pass on the recent rate cut 3 days after it was announced. The worst offenders are Bendigo Bank and Adelaide Bank making their customers wait until  the 28th November before they get some relief.

NAB are waiting intil the 11th to pass on the cut while ANZ and Westpac are letting their customer wait 2 weeks until they recieve relief. In a funny move BankWest are reducing their interest rates on the 14th of November but they are letting their Rate Tracker and Rate Tracker Ultra customers wait until the 18th. They say it is apart of their terms and conditions for these products.

Current Bank Interest Rates

Bank Rate Cut Effective date New Rate
Adelaide Bank/ Bendigo Bank -0.25% 28th Nov 7.55%
AMP -0.25% 11th Nov 7.57%
ANZ -0.25% 14th Nov 7.55%
Bank of Melbourne -0.25% 14th Nov 7.55%
BankWest -0.25 14th to 18th 7.45%
Citibank -0.25% 18th Nov 7.77%
Commonwealth Bank -0.25% 4th Nov 7.56%
Connective Home Loans -0.25% 7th Nov 7.57%
Homeside Lending -0.20% 11th Nov 7.45%
ING Bank -0.25% 7th Nov
Member equity bank ( ME) -0.25% 7th Nov 7.54%
Macqauire Bank -0.25% 21 Nov 7.55%
NAB -0.20% 11 Nov 7.47%
St George Bank -0.25% 14th Nov 7.55%
Suncorp Bank -0.25% 18th Nov 7.58%
Westpac -0.25% 14th Nov 7.61%

Please Note: The rates above are each banks standard variable rate. There are many other loans and discounts available from these lenders

Obviously, the strategy of delaying interest rate decreases and passing on rate increases quickly is all about profit making. All banks and non banks are guilty of this practice and there is not much the consumer do about it but vote with their feet.

If you are interested in getting a FREE HOME /INVESTMENT LOAN CHECK from an ASIC liscenced broker in your local area, feel free to complete the contact form below. They will compare your mortgage against hundreds or other loans to see if you are over paying on interest repayments and fees.

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How Mortgage Brokers Can Help…

More than ever mortgage brokers can significantly save you time finding a home or investment loan due to the new  regulatory requirements.

The new legislation requires that all lenders and brokers assess an applicant before they can recommend products. Often this requires supporting documentation that includes;  tax returns, pay slips, identification, other loan statements such as car, personal and home loans and other forms of documentation. Also, if there are two applicants then both have to be present at the interview.

If you were to shop around for a mortgage then this process can be very time consuming. Using a mortgage broker can take one lot of documentation, one interview and compare your requirements to hundreds of loans. It is really that simple.

Most brokers have at least up to 30 lenders to choose from that include the major banks, second tier banks as well as non bank lenders. Therefore, you are likely to get one of the most competitive loan solutions based on your finance needs.

If you are interested in speaking to a licensed and experienced mortgage broker in your local area please submit a mortgage quote.

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Fixed Rates to fall after RBA keeps interest rates on hold.

Interest rates remain on hold at 4.75% this month after the Reserve Bank of Australia made their decision yesterday afternoon.

Later that day Commonwealth bank further reduced its 1 and 3 year fixed rates from the previous month. It looks like other lenders are to follow as the weeks go by. I will keep you updated with the latest fixed rate offerings over the coming weeks otherwise contact one of our mortgage brokers.

Fixed rate falls also suggest that the variable rate is likely to drop in the coming months and some economists are predicting an interest rate reduction before Christmas. Economists predictions should be taken with a grain of salt. Short term predictions – 6 months of less – are often accurate but beyond 6 months making predictions is just like gambling.

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Home loans being discounted more than normal by the banks.

Looks like competition is hotting up in the Australian mortgage market. Variable  home loan rates have traditionally been discounted by 0.70% when borrowing more than $250,000, and now we are seeing discounts over 1%.

Discounts depend on the lender but there is a common theme amongst the banks. They are looking for low risk borrowers that borrow less than 80% of their property value. Discounts can also be found for larger sized loans.

To find out which of these lenders and loans that may suit your lending requirements please contact one of our mortgage brokers.

 

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Mortgage Calculators to Find Out How Much You Can Borrow.

Australian online mortgage calculators can provide a good guide as to how much you can borrow. However,  you need to be realistic when using these calculators as they make various assumptions about your living expenses and lifestyle.

Here are some calculators to help you make a more accurate assessment of how much you can realistically borrow.

A budget calculator is an excellent resource to estimate your weekly, monthly and yearly costs. It basically works by inserting your expenses and the amount that you save each week or month plus rent paid is a good determinate of how much you can borrow.

Once you have worked out how much you can save each month you can use this figure to estimate how much you can borrow by using a borrow amount calculator. This will give you an estimate of how much mortgage providers are likely to lend to you. 

Please note that the amount you can borrow is only an estimate. Most lenders have different criteria when assessing each applicant and the amount you can borrow can vary significantly.

 The best way to find how much you can borrow from a number of lenders is employing the services of a mortgage broker.  They can save you time by submitting one application and work out how much you can realistically borrow from a number of lenders.

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Mortgage Brokers Help Save Finding a Loan with New Credit Laws

The new National Consumer Credit Protection Act  (NCCP) makes it harder for borrowers to compare loans.

Recent law changes to the mortgage industry require mortgage brokers and lenders to qualify a client before recommending a mortgage product. This requires more documentation and checks than ever before seen in the industry. It  can be exhausting and time consuming for the consumer to submitsupporting documentation to each lender before they can recommend a home or investment loan.

 This means  that the consumer will settle on one lender  or comparing  a few lenders due to the frustration of submitting documentation to a lender before they can recommend a product. This could cost the consumer by missing out  on a loan  product that could save them thousands of dollars over the life of the loan.

mortgage broker can help save time by allowing the borrower to submit one set of supporting documentation and recommend various products from multiple lenders that are suitable.

Most mortgage brokers have at least 10 lenders they can choose from and they should have access to all the major banks.  Ask your broker what lenders they have access to and  make sure they are accredited with the major banks.

If you are looking for a mortgage broker in your local area please contact Smart Search Finance by submitting a mortgage quote.

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