Non-banks get in on rate cut action

by Adam Smith12 Dec 2011

Non-banks have entered the rate cutting fray after major lenders finally moved last week.

Banks bowed to political and popular pressure last week to pass on the Reserve Bank's 25bp cut. Non-banks have now followed the lead, with three of the lenders making cuts to their products.

Liberty Financial announced it would cut 25bps off its products, dropping the rate on its basic home loan to 6.49%. The cut will come into effect from 12 December for new customers and from 19 December for existing customers.

Liberty Financial national sales manager John Mohnacheff said the rate cuts could help to boost a sagging credit market in the year ahead.

"With credit growth and consumer confidence both down, this change will create momentum and set the scene for an improved outlook in 2012," he said.

FirstMac and Australian First Mortgage have also said they will pass on the full 25bp cut. AFM's move will bring the rate on its 95% LVR full doc product to 6.49%.

Second tiers have also followed the Reserve Bank move, with AMP Bank and Westpac subsidiaries St. George, BankSA and Bank of Melbourne announcing 25bp cuts.

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