Don't rule out the banks cutting home loan interest rates
The Reserve Bank of Australia (RBA) may have left interest rates on hold for June but mortgage owners should not rule out seeing the banks reducing home loan interest rates.
Throughout 2012 many lenders vindicated the high costs of global funding to justify withholding full rate cuts from their customers. With the cost of funding easing the banks should be finding they now have room to pass on interest rate cuts to their products.
When the RBA made the decision to cut interest rates to a record low of 2.75 percent last month, the banks went into a frenzy of competition to see who could deliver the most jaw dropping headline, slashing rates on home loans in an attempt to attract new customers. The likes of Greater Building Society and ANZ even went as far as to pass on cuts over and above the RBA's 0.25 percent cut.
With the banks no longer moving strictly in line with the RBA, competition for new customers still high and lowered costs of funding giving lenders room to move their interest rates, it seems that out-of-cycle rate cuts are a real possibility.
According to Loan Market spokesperson Paul Smith, out-of-cycle rate cuts could be the next area of heated competition between lenders, reports the Australian Broker Online.
Those looking to get the best of the current cycle of low interest rates can compare and find the the best home loans here.
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