A number of non-major lenders have reduced their variable home loan rates, most of which have fallen short of the full 25 bps cut.
Several non-major lenders have announced home loan rate reductions following the Reserve Bank of Australia’s (RBA) decision to cut the cash rate to 0.75 per cent.
The latest rate changes are as follows:
Macquarie’s mortgage rates have been cut by 15 bps, effective from 17 October.
From the effective date, Macquarie’s owner-occupied variable rates will start from 3.09 per cent.
ING has reduced its variable mortgage rates by 15 bps.
The changes will apply to both new and existing customers from 16 October, after which its rates will start from 2.99 per cent.
Suncorp has lowered its variable mortgage rates by 15 bps, effective from 18 October.
Once the changes come into effect, Suncorp’s variable mortgage rates will start from 3.03 per cent.
Bendigo Bank will reduce all variable home loan interest rates by 15 bps.
The non-major will also reduce its business variable rate term loans and overdrafts by 20 bps.
Bendigo’s managing director, Marnie Baker, commented: “We take into account an array of potential outcomes when deciding on rate changes, particularly in a record-low interest rate environment.
“These rate changes carefully consider the diverse interests of all stakeholders, the performance of our business, our market competitiveness and our deep connection with, and responsibility to, communities right across our national network.”
Bendigo’s mortgage rate changes will be effective from 15 October 2019, while business rate changes will be effective from 25 October 2019.
AMP Bank will reduce interest rates across all variable rate home loans by 15 bps, effective from 14 October.
AMP Bank CEO Sally Bruce commented: “We are managing our business in a very active market, and decisions like this are considered carefully and thoroughly.
“We remain committed to providing competitive rates for our new and existing customers, and today’s decision has been influenced by continued pressure on costs as well as a desire to balance the interests of home owners and savers.”
BOQ has reduced its variable mortgage rates by 10 bps, with the exception of investment loans with interest-only terms, which have been cut by the full 25 bps.
BOQ’s cuts will take effect on 25 October.
Lyn McGrath, group executive of retail banking, commented: “This is a decision BOQ has carefully considered, balancing the needs of our customers in this historically low interest rate environment.”
BOQ subsidiary Virgin Money has reduced its variable mortgage rates by 15 bps, with the exception of investment loans with IO terms, which have been cut by 20 bps.
These changes will take effect on 25 October 2019.
Virgin Money CEO Greg Boyle said: “We’ve carefully considered the needs of our customers when making this decision.”
MyState has passed on 15 bps to its variable mortgage customers, effective 14 October 2019 for new loans and 29 October 2019 for existing loans.
Following the changes, MyState’s owner-occupied base variable rate will fall to 3.23 per cent.
MyState Bank’s general manager banking, Tony MacRae, said: “With the Reserve Bank cash rate at record lows, our changes are aiming to balance the needs of both our deposit and lending customers.
“We are continuing to work hard to maintain competitive rates for our deposit customers, many of whom are saving towards a specific goal or are self-funded retirees.
“Decisions such as these are difficult, and we certainly have not taken this decision lightly. We believe this delivers a fair balance of outcomes for both deposit and lending customers”.
HSBC Australia has reduced its variable mortgage rates by 15 bps.
From 21 October, HSBC’s variable rates will start from 3.02 per cent.
Heritage Bank has lowered its variable mortgage rates by 15bps.
The bank has also announced cuts to its personal loan and credit card rates, which it has slashed by the full 25bps.
Heritage’s acting CEO Paul Williams said: “A reduction in interest rates is good news for borrowers, but not so good for depositors, especially when rates are already at their lowest point in history.
“We know there are people who depend on the interest they earn from deposits to fund their living costs.
“Two-thirds of our customers are depositors, and only one-third are borrowers, so we have to consider what’s best for everyone.”
He added: “The reality is also that we don’t have the big profit margins of the majors, because we always look to provide great value to our customers, so we have less room to move.
“We’ve passed on as much o4 f the RBA rate cut as we can afford, while balancing the needs of our customers as a whole.”
The rate cuts will come into effect from 15 October.
Auswide Bank has lowered its variable mortgage rates by the full 25 bps.
The bank’s variable mortgage rates now start from 3.24 per cent.
The member-owned bank has reduced rates by 10 bps, effective from 22 October.
Once the changes come into effect, Bank Australia’s variable mortgage rates will start from 3.18 per cent.
Regional lender Newcastle Permanent has reduced variable mortgage rates by 13 bps.
From 22 October, the lender’s variable mortgage rates will start from 3.19 per cent.
FreedomLend has dropped rates by the full 25 bps.
The non-bank’s variable mortgage rates will now start from 2.79 per cent.
Qudos Bank has reduced variable rates by 15 bps, effective from 15 October.
Once the changes come into effect, rates will start from 3.13 per cent.
P&N Bank has lowered its mortgage rates by 16 bps, effective from 15 October.
The lender’s rates will start from 3.47 per cent.
RAMS will reduce its variable mortgage rates by 15 bps.
From 16 October, RAMS’ rates will start from 3.86 per cent.
RACQ Bank has lowered its variable mortgage rates by 15 bps, effective 8 October.
Once the changes come into effect, the lender’s rates will start from 3.24 per cent.
These changes follow cuts from all of the big four banks and non-bank lenders Athena Home Loans, Homestar Finance and Reduce Home Loans.
“The banks have a lot of explaining to do,” Mr Frydenberg said.
“This is very disappointing by the banks, and customers should vote with their feet.”
The Treasurer encouraged borrowers to consider switching to alternative lenders with lower mortgage rates.
“Now, some of the smaller lenders have actually passed on this rate cut in [full],” he said.
“People should shop around, get the best deal, but also make their displeasure known to their banks because the rate cuts should be passed on in full, and that would be a good thing for consumers.”
[Related: Non-majors slash variable mortgage rates]
Charbel Kadib is a journalist on The Adviser and Mortgage Business.
Before joining Momentum Media in 2017, Charbel held roles with public relations agency Fifty Acres, and the Department of Communications and the Arts.
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