ABN AMRO will reduce its reverse mortgage interest rate by 1.05 per cent next Monday following the Reserve Bank’s one per cent rate cut earlier this month.
The reduction will bring ABN AMRO’s rate to 7.65 per cent which it claims will be the lowest rate available from any mainstream lender.
The lender, which distributes 90 per cent of its reverse mortgages through mortgage brokers, is also optimistic that 2009 will be a good year for the reverse mortgage market.
“The hardest thing for the reverse mortgage market has been high interest rates,” Martin Lynch, head of ABN AMRO reverse mortgages and financial markets told Mortgage Business.
“With the dramatic reduction we’ve now seen in interest rates we could see some significant growth in 2009.
“The demand for reverse mortgages is definitely still there.”
ABN AMRO recently won the Money Magazine Gold Award for its reverse mortgage for the third year in a row.
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