As the spring property season draws to a close, lenders are slashing interest rates on owner occupier home loans in preparation for a flood of first home buyer activity, Mozo data has shown.
Since the start of October, no less than thirty lenders from Mozo’s database have lowered variable rates on at least one of their home loan products. And according to Mozo Director Kirsty Lamont, the recent rate reductions come just at the right time for first home buyers.
Factors such as cooling house prices in key markets and stamp duty exemptions in Victoria and New South Wales have opened the door for young property hopefuls recently. APRA’s moves to tighten lending standards this year have also meant investors are treading a little more carefully - leaving some much-needed elbow room for first home buyers looking to break into what has been a red hot market.
“The end of the spring property season has brought with it some more welcoming conditions for first home buyers and lenders are clearly ready to entice these borrowers in with rock bottom home loan rates,” said Lamont.
The average cut for an owner occupier borrower making principal and interest repayments was 15 basis points, but one lender cut its rates by more than five times that amount. There are now 70 lenders in Mozo’s database offering up rates under 4.00%, with the lowest rate in market now a seriously competitive 3.39%.
“These days, lenders really want to have a headline variable rate with a ‘3’ out in front in order to attract money-savvy borrowers,” said Lamont.
