Media Release

finder.com.au Interest Rate Update: 6 lenders announce rate cuts

February 3, 2015, Sydney – Comments by Michelle Hutchison, Money Expert at comparison website finder.com.au:

"Six lenders out of more than 100 monitored by finder.com.au have so far announced rate cuts to their variable home loans since the Reserve Bank announced the cash rate drop yesterday. These include Bank of Queensland, Commonwealth Bank, ING Direct, Maitland Mutual Building Society, ME and Westpac.

"The biggest rate cut was by Westpac, announcing a 0.28 percentage point reduction effective February 20, 2015. However Westpac still holds one of the highest standard variable rates, which will drop to 5.70 percent on February 20.

"The lowest standard variable rate out of these six to have dropped so far is by ING Direct, which will be offering a standard variable rate of 4.97 percent.

"We're expecting all lenders to make their announcements some time over the next week and the effective dates are so far from February 20. Borrowers need to be careful with the announcements they hear to make sure they understand their home loan details because the effective date could be several weeks after the announcement. For instance, if you repay your variable mortgage on a monthly basis, your reduced repayments won't come into effect until next month.

"Borrowers will receive notification by their lender with a rate change, usually by the post, and it will explain the new interest rate and new minimum monthly repayments. Keep in mind that you don't have to reduce your repayments – you can call your lender and ask them to keep your repayments at the former amount as this will save you on interest charges and pay off your home loan sooner. For instance, let's say you have an average $300,000 home loan at 5.35 percent average variable interest so monthly repayments are about $1,675. If your lender passes on a 0.25 percentage point discount and offers a new minimum repayment of about $1,629. By keeping your repayments at $1,675, you could potentially save over $20,000 and shave almost two years off the 30-year loan term."

The table below shows the lenders that have so far announced rate cuts and we will be updating this page as we hear more announcements, which you're welcome to link to: www.finder.com.au/rba-cash-rate

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Disclaimer

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.

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More than 3 million Australians turn to finder.com.au every month to save money, time and make important life choices. We compare virtually everything from credit cards, phone plans, health insurance, travel deals and much more.

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