Home Mortgage News Rate Watch: Small lenders pass on full rate cut

Rate Watch: Small lenders pass on full rate cut

Published on 04 Oct, 2019

They decided to get ahead of the competition by reducing their rates in line with the RBA's cut

Small lenders have passed on the RBA's rate cut in full.

Home-loan lenders are heating the competition as they pass on the cash-rate cut in full.

The Reserve Bank of Australia decided to slash the official cash rate to a historic low of 0.75%. Big banks refused to pass on the full 25-basis point cut, citing profit-margin issues.

Also read: Treasurer urges banks to pass on rate cut in full to home-loan borrowers

Given the current environment, smaller lenders are attracting potential borrowers with bigger rate discounts. For instance, UBank decided to pass on the 25-basis point discount, bringing its standard variable rate to 2.84%.

Athena Home Loans also repriced its home-loan product to reflect the RBA's recent move. The lender is planning to slash its standard variable interest rate to 2.84% for owner-occupiers with principal-and-interest-rate loans and to 3.24% for investors.

Joining the trend is Auswide Bank, which reduced the mortgage rate of its RBA Rate Tracker Home Loan. Its owner-occupier clients with principal-and-interest-rate payments will enjoy a lower mortgage rate of 3.24%.

Freedom Lend and Homestar Finance also announced 25-basis-point cuts, bringing their respective variable rates to 2.79% and 2.74%.

Collections: Mortgage News FreedomLend News & Guide Collections

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