Wave of rate cuts continues: who and how much

by Maya Breen05 Feb 2015
Following the RBA’s decision to cut the cash rate, others have followed suit.

The majority of lenders have passed on RBA’s full 25 basis point rate cut to their customers but Westpac has decided to exceed the rest by reducing their standard variable rate by 0.28% to 5.70% per annum.
 
This new rate will see Westpac’s home loan rates at their lowest level in six years, saving homeowners $624 per year on their repayments for an average mortgage of $300,000.
 
Yellow Brick Road Holdings Limited will cut rates on its Empower range of home loans by 25 basis points, offering customers a variable rate of 4.38% per annum on the Rate Smasher home loan, the lowest variable rate YBR has offered.
 
Their Empower Home Loan has also been cut to a variable rate of 4.64% per annum.
 
St George Bank, Heritage Bank and Bank of Melbourne will all cut their variable rate by 25 basis points. St George announced a cut from 5.99% to 5.74% per annum, which their General Manager Andy Fell says, “will help more customers into new homes.”
 
Heritage Bank’s special Discount Variable rate will sit at 4.34% and its special Standard Variable rate at 4.64%.

Heritage CEO John Minz said the cut, “maintained Heritage’s competitive advantage against the big banks and delivered on its People first philosophy.”
 
Bank of Melbourne standard variable home loan rate will go from 5.90% to 5.65% per annum.  
 
Mortgage House Australia has also responded by cutting interest rates by 0.25% on their Advantage Home Loan Product Range, the first time since August 2013 and to a record low of 4.34%.
 

COMMENTS

  • by Bill 5/02/2015 9:10:37 AM

    Amazing that more people don't look at the smaller lenders. Westpac cuts their SVR to 5.70% - smaller bank/mutuals have got theirs lower than that BEFORE the cut.

  • by Tom 5/02/2015 9:54:27 AM

    Bill, nobody pays the SVR rate, so I'm perplexed at why we keep quoting it.

    You used Westpac as an example, most borrowers will be signed up under their package, and will generally receive at least a 0.7% discount, meaning the actual rate is 5.0% or less.

    Oh, and that's before applying the special pricing that has been available for 18 months or more, and we brokers are more than happy to help our clients by requesting special pricing from the major lenders.

    And besides, a loan is about more than just an interest rate. After all, what good is a cheap SVR from a small lender if their credit policy excludes most borrowers from an approval?

    What's more important, a cheap headline rate, or a tailored solution that allows a borrower to live the dream?

    I'm all for making the dream a reality, and a quick efficient approval combined with a competitive rate is what I'm looking for, and that's where the small lenders fall.

  • by Richard 5/02/2015 10:02:48 AM

    Bill, nobody pays SVR. If you are comparing lenders based on SVR I'm afraid you don't know what you are doing. All my clients have loans with significant life of the loan discounts which reduces the variable rate to significantly below SVR. Comparing loan rates of lenders based on an arbitrary and vague concept like SVR is just plain incorrect.