Cash rate holds but lenders move rates: borrowers urged to take advantage of mortgage season promotions
- finder.com.au Reserve Bank Survey of 28 leading experts all predicted the cash rate hold
- Lenders offer mortgage season incentives to attract new borrowers
- Home loan rates still moving: make sure you compare your rates!
October 7, 2014, Sydney – Borrowers are being urged by one of Australia’s biggest comparison websites finder.com.au to take advantage of special home loan offers this mortgage season and compare their home loan to other lenders, following the Reserve Bank announcement to leave that official cash rate on hold at 2.50 percent.
All 28 leading experts in the finder.com.au monthly Reserve Bank Survey predicted the cash rate would remain on hold today. The survey shows that the cash rate is expected to start rising next year, after some experts pushed back their forecasts from previous surveys.
For instance, six months ago the finder.com.au Reserve Bank Survey showed almost half of the respondents (five out of 11) expected the cash rate to start rising this year. These economists included Michael Blythe from Commonwealth Bank, Savanth Sebastian from CommSec, Paul Bloxham from HSBC, Janu Chan from St George Bank and Michael Witts from ING Direct. Now, all of the experts are betting on a cash rate rise next year, with an average forecast of June 2015.
Michelle Hutchison, Money Expert at finder.com.au, said it could be a good time for borrowers to take advantage of home loan special offers currently available.
"With a cash rate rise on the horizon, it could be a good time for borrowers to take advantage of the mortgage season promotions, which could help them get onto the property ladder so they can start preparing for rate hikes ahead.
“It could also be beneficial to existing borrowers, who may be able to find a cheaper deal or renegotiate with their existing lender.
“For instance, according to the finder.com.au/home-loans database, there are currently six lenders offering cash-back deals of up to $1,000. These lenders include NAB, Austral Mortgage, Commonwealth Bank, Heritage Bank, Homeloans.com.au and Newcastle Permanent.
“We also found 11 lenders offering waived fees for new home loan customers, including St George Bank, Resi and ING Direct. There are also other limited time rate discounts including Suncorp Bank’s Back to Basics variable home loan, with a discount of 0.72 percentage points intro for the first three years (4.69 percent).”
Mrs Hutchison said that despite no cash rate changes in the past year, home loan interest rates have moved.
"We're still seeing home loan interest rate movements, with 94 fixed home loans that saw reduced rates by as much as 0.70 percentage points over the past month, and 23 fixed rates increased by up to 0.30 percentage points. Interestingly, 27 variable rate home loans have fallen in the past month, by up to 0.30 percentage points from ANZ, My State, IMB, Bendigo Bank, Resi, Suncorp Bank, Wide Bay Australia and State Custodians.
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"We're not surprised by these promotional offers available right now because we usually see an influx of incentives at this time of the year. It's currently mortgage season during spring, which is traditionally the busiest time of year to buy, sell and refinance so the home loan market is in a spin to try and take advantage of the high demand. And while it's unusual to see variable home loan rates move out of cycle, lenders do have room to move as most have not passed on all the past cash rate cuts in full.
"If you're looking to buy or refinance this mortgage season, it's a good idea to compare home loans and the promotional offers available but make sure you compare the cost of the loan including the interest rate you will receive and all the fees involved to make sure the costs don't outweigh any incentives offered."
For further information
The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com.au's review pages for the current correct values.
More than 3 million Australians turn to finder.com.au every month to help them save money, time, and make important life choices. We compare virtually everything from credit cards, phone plans, health insurance, travel deals and much more.
Our free service is 100% independently-owned by two Australians Fred Schebesta and Frank Restuccia. Since launching in 2006, we’ve helped our users make more than 17 million decisions.
We continue to expand and launch around the globe, and now operate in the United States and United Kingdom.