Battle of the lenders
Reduce Home Loans continues to lead the pack with its newly released home following the June RBA Rate Drop, according to comparison site Rate City.
Reduce’s Owner Occupier Low Rider Variable Loan sits 0.05% lower than other non-bank lenders in the market, at 3.09% p.a (3.12%*(1) p.a. comparison) with an 80% deposit.
Image source: RateCity.com.au
Rate City Research Director Sally Tindall forecasted variable rates to drop below 3 per cent pending future RBA decisions.
“If the RBA cuts again, we will almost certainly see variable rates drop below 3 per cent,” she said.
Comparison site Mozo has also discovered the new Low Rider Variable Home Loan, coining it as a ‘rock-bottom variable rate’ at 3.09% p.a. (comparison 3.12%*(1) p.a.)
Since the loan product’s release, Reduce Home Loans has lifted the criteria to allow 80% lending on the new loan product – a step up from the initial 60% LVR offering.
On 80% LVR, those looking to purchase a house require 20% deposit, which is $80,000 on an average loan of $400,000.
Ahead of the Banks
Meanwhile, the Big 4 continue to stow their rate drops until later this month. Some are taking up to 3 weeks to pass the rate cut.
In addition, two of the Big 4 have confirmed they are not passing on the full 0.25% to customers, leaving most borrowers scratching their heads.
In light of this, borrowers are encouraged to shop around as many lenders such as Reduce Home Loans, offer full-featured loans at super low rates.
Finder insights Manager, Graham Cooke, reflects on the shift in borrower sentiment following this month’s RBA decision.
“This historically low (RBA) rate will open lots of eyes to just how good the current offers are,” Cooke said.
“Generally speaking, for those with an average home loan size of just less than $400,000, a 25 basis point drop could save you $60 a month or more.”
This means the borrower can pocket $21,000 over the 30-year life of a loan.
Find out how much you could save by comparing interest rates on our Mortgage Calculator.