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Three lenders announce rate cuts

by Reporter4 minute read
Rate cuts

Resimac has now reduced its rates by 150 basis points this year after making another cut of 85 points.

The non-bank lender will pass on the Reserve Bank’s recent 0.25 per cent rate cut to both prime and specialist borrowers.

In a special offer that will last until September 30, Resimac has also announced an additional rate cut of up to 60 points across its entire specialist lending product range, taking the total reduction of up to 85 basis points for new business.

Chief commercial officer Allan Savins said this was the third time this year that Resimac has reduced its specialist rates.

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“We passed on the RBA’s full 25-basis-point rate cut in February and then further reduced our rates with the simplification of our specialist lending products in March,” he said.

“This latest round of reductions will see some of our rates reduced by as much as 150 basis points since the beginning of the year.”

Firstmac will also pass on the Reserve Bank’s rate cut, taking its variable interest rate to 4.19 per cent as of May 25.

The non-bank has also reduced the minimum loan size on its VIP Package. Borrowers will now be able to access the 4.19 per cent rate with a $250,000 mortgage, compared to the previous minimum of $450,000.

Managing director Kim Cannon said the VIP Package special will enable brokers to offer a cheap rate, with no annual fee, to more customers.

“Three of the big four banks have not passed on the RBA rate cut in full, which leaves their customers with some big questions,” he said.

“There is plenty of competition in the home loan market, and bank customers can see they could be saving money on interest if they chose another lender.”

Meanwhile, AMP Bank will reduce interest rates across all variable rate home loans by 0.20 per cent, effective May 25, lowering the Essential Home Loan rate to 4.20 per cent.

The bank said it had declined to pass on the full Reserve Bank cut because the official cash rate is “only one of a number of factors” that must be considered when pricing mortgages.

“Other factors include the cost of wholesale funding that we obtain from both the local and overseas markets, the price of raising deposits from retail customers, and the current market conditions and our competitive position,” AMP Bank said.

[Related: Revolutionary new product cuts rates to 2.75pc]

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