Borrowers can expect relief regardless of RBA decisions, say brokers

by AB21 Mar 2013

Mortgage holders can expect some interest rate relief from their lenders regardless of whether the RBA lowers its cash rate, according to a national survey.

In a poll of its own brokers, aggregator 1300HomeLoan found 76% believe banks are set to adjust variable home loan interest rates independently of the RBA.

1300HomeLoan managing director, John Kolenda, says the survey of 214 brokers found 51% thought there would be some slight reductions of up to 0.10% by lenders.

Kolenda says 25% of respondents expect cuts of up to 0.25%, while 24% don't anticipate out-of-cycle movement on rates by the banks ‘any time soon’.

"The RBA has maintained its cash rate at the near record low of 3.0% so far this year and that doesn't look like changing despite some underwhelming official housing finance figures for January, 2013.”

He says that, while the RBA is ready to cut rates again ‘if necessary,’ it also feels the 175 basis point cuts made over the past two years have boosted key sectors of the economy, including housing.

“The expectation now is that consumers are set to benefit from some movement on variable rates from the banks independently of the RBA. The banks have no issues at the moment with cost of funds and as they compete for more business variable rates could be reduced slightly in the months ahead. Our expectation is that it will only be minor adjustments of 0.05% to 0.10%. These reductions will be sufficient for lenders to come out slightly better than their competitors."

 Kolenda says it’s an ‘ideal’ time for borrowers to shop around for a better home loan deal.

"Borrowers are best advised though to speak to a professional about their home loan options and mortgage brokers have more insight as to what's going on with the different lenders, as well as the structures for any fees and charges.”