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Lenders slash variable rates

by Staff Reporter8 minute read
The Adviser

Staff Reporter

Three lenders have bucked the trend and cut the interest on their variable rates.

According to research conducted by RateCity, IMB, BMC Mortgage and Holiday Coast Credit Union all cut their variable rates this week.

IBM cut one of its home loans by 0.05 per cent, while BMC Mortgage cut several loans by 10 basis points and Holiday Coast Credit Union cut 20 basis points from a few of its products.

Spokesperson for RateCity Michelle Hutchison said this is the first time in a long time that three lenders have cut their variable rates out of cycle with the Reserve bank.

"While there have been several rate increases out-of-cycle, we've never seen lenders drop variable home loan rates while the cash rate remains stable,” she said.

"Lenders have room to move after keeping on average 0.42 percentage points of the Reserve Bank’s 1.75 percentage point cut to the cash rate since November 2011 from variable home loan borrowers. If these three lenders can afford to cut variable rates out-of-cycle, other lenders – including the major banks – have no excuse to sit on their hands.”

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