Australian Property News

New home loan deals beating RBA rate cuts

Posted on Monday, January 21 2013 at 3:19 PM

While banks are often criticised for not passing on official interest rate cuts in full, a few are actually offering deals that exceed reductions by the Reserve Bank of Australia, one broker says.

When the RBA last lowered the cash rate in November by 0.25 per cent, banks cut their standard variable rates by an average of 0.19 per cent.

However, Smartline Personal Mortgage Advisers executive director Joe Sirianni says home loan packages offered to new clients were cut by an average of 0.29 per cent.

“In other words, if you go to the trouble of making yourself a ‘new customer’, the banks will fight for your business.

“This has come about because the number of new home loans being written has significantly decreased in recent years as Australians shy away from taking on debt.”

He says competition has heated up and banks are trying to grow their market share from a relatively small pool of business.

“As a result, they’re prepared to ‘sharpen their pencil’ and offer an extremely competitive rate to secure a new customer.

“If you want a better home loan deal, it might be time to consider becoming a new bank customer with another lender, or asking your existing lender for the type of deal they’re offering new customers.”