Another lender has moved out of market and reduced interest rates on its products, despite the central bank’s decision to hold the official cash rate last week.
Bluestone Home Loans (Bluestone) has become the second non-bank lender to cut rates outside of market, reducing its baseline rate across several pricing tiers.
New rates apply to Bluestone’s Prime and Near Prime residential home loan products and are available immediately to the lender’s accredited broker network.
Under the new pricing, the rate for Bluestone’s Prime Full Doc loans has been reduced by 0.20 per cent p.a. for loan-to-value (LVR) ratios of 80 per cent and lower.
The rate for Prime Alt Doc loans has been reduced by up to 0.15 per cent p.a.
And the rate for Near Prime Full Doc loans has been reduced by up to 0.20 per cent p.a. for LVRs of 85 per cent and lower.
Bluestone’s new pricing comes after the Reserve Bank of Australia (RBA) confirmed it would be maintaining the official cash rate at its current rate of 3.60 per cent.
Tony MacRae, Bluestone’s chief commercial officer, said the lender was pleased to be able to deliver some good news to borrowers.
“These rate reductions are about giving brokers more opportunities to support their clients, and helping more Australians access flexible, competitive home loan solutions in a changing market,” he said.
Out of market
The decision saw Bluestone become the second lender to reduce rates out of cycle after Mortgage Ezy also confirmed it would be cutting rates last week.
Mortgage Ezy reduced rates by up to 0.50 percentage points for new borrowers, with an average cut of 25 basis points across its loan suite.
Broker clients can now access variable rates as low as 5.44 per cent on prime loan refinances and 6.19 per cent on self-managed super fund refinances.
Open opportunities
While the RBA’s decision was widely expected, given stronger-than-anticipated monthly inflation data and a decline in unemployment, it has prompted many economists to revise their cash rate forecasts.
For example, economists from major lenders National Australia Bank (NAB) and Commonwealth Bank of Australia (CBA) have both revised their forecasts, suggesting the next rate cut may not come until next year.
Westpac’s chief economist, Luci Ellis, also said that a November rate cut was “far from assured”, but still believes “the choice is still when to cut further, not whether”.
Meanwhile, ANZ has maintained its call for a November cash rate reduction, followed by a sustained period where the cash rate will be held at 3.35 per cent.
Speaking to The Adviser about Bluestone’s decision to move out of the market, MacRae said it was important for brokers to be able to offer competitive options.
“Brokers serve a diverse range of clients with varying financial needs and goals, so having access to a wide range of products means they can find the right fit for each person,” he said.
“And more choice leads to better outcomes for borrowers. Our recent cuts open up more opportunities for brokers working with Near Prime and Prime Alt clients – people who might not tick every box on a traditional application but still deserve a fair shot at home ownership.”
[Related: Banks adjust rate trajectory following RBA decision]
