Don't hold your breath on out-of-cycle cuts, says lender

by Mackenzie McCarty22 Feb 2013

Variable borrowers are being urged to make 2013 the year to save more on their home loans, following announcements that at least three lenders have cut variable interest rates out-of-cycle  – but one of those lenders warns, ‘not so fast’.

Michelle Hutchison, spokesperson for financial comparison site RateCity, says it's the first time the site has recorded three lenders cut variable home loan rates out-of-cycle.

"While there have been several rate increases out-of-cycle, we've never seen lenders drop variable home loan rates while the cash rate remains stable. Lenders have room to move after keeping an average 0.42 percentage points of the RBA’s 1.75 percentage point cut to the cash rate since November 2011, from variable home loan borrowers. If these three lenders can afford to cut variable rates out-of-cycle, other lenders – including the major banks – have no excuse to sit on their hands.”

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  • by PeterT 22/02/2013 11:08:57 AM

    Hutchison needs to think a bit harder about his statements. Most lenders have offered out of cycle decreases via discounts on offer, they just haven't dropped their standard variable rates. I will grant him though, that he only really talks about SVRs because it makes his sponsors look better than they are.
    The rate drops he's talking about are nothing special either. These lenders are just falling in line with what everyone else has been offering for over 12 months now.