Powered by MOMENTUM MEDIA
the adviser logo
Lender

Disparity between RBA and bank rates confusing mortgagors

by Reporter2 minute read
Confused

Consumers are increasingly caught in ‘camp confusion’ as lenders increase their interest rates despite the cash rate being at its record-low level for the tenth month in a row.

Mortgage broker network 1300HomeLoan said, however, that the confusion is a boon for brokers, as “consumers cannot expect any relief from the [Reserve Bank of Australia] any time soon”.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

Managing director John Kolenda said the “sluggish” domestic economy and subdued consumer sentiment are normally triggers for a rate reduction, but that the RBA has held cash rates “because the central bank is worried about the impact of an interest rate cut in the bullish property markets of Sydney and Melbourne”.

He added that any potential cuts in the cash rate in future could also be nullified by out-of-cycle hikes by lenders.

“Rates are moving outside any decisions being made by the RBA as lenders are exposed to global markets and cost of funds,” Mr Koldenda said, suggesting that “complacency” by mortgagors could cost them “thousands of dollars a year”.

Noting that there are rate movements across different products that are “creating large variations across lenders”, he concluded that the “greater confusion for home loan customers has reinforced the need to use a mortgage broker”.

[Related: Brokers to benefit from APRA crackdown: Kolenda]

Disparity between RBA and bank rates confusing mortgagors
confusing
TheAdviser logo
confusing

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

mark lewis fast ta llosc4

In Memoriam: Mark Lewis, 1963–2022

Mark Lewis passed away on Saturday (13 August). Mr Lewis was a well-known identity in the third-party broker...

READ MORE
anthony waldron mortgage choice ta ithtxm

Broker expertise key for securing right loan: Mortgage Choice

The data, which is derived from a June survey of 1,002 broker customers and conducted by Honeycomb Strategy,...

READ MORE
Mark Bouris new ifa

Brokers need to focus on the ‘value-add’: Mark Bouris

With competition among brokers increasing as the number of brokers rises – coupled with the fact that fewer...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more