Loan applications double for lender after rate cut

Online lender loans.com.au has reported that the home loan applications they receive have doubled since it passed on the Reserve Bank's (RBA) full 25 basis point February cut.

The online lender now offers its variable rate loan at 4.23% per annum.

Kim Cannon, managing director of Firstmac, which funds loans.com.au, said in the past week, loan applications have increased by more than 100%.

According to comparison website Finder, loans.com.au offers the lowest standard variable rate of any lender in the market.

Cannon said the majority of borrowers are seeking variable rate loans, despite the official cash rate's record low.

"Some sectors of the market speculate that the RBA is not quite finished with cutting the cash rate, which would mean we could see another drop before the year is out," said Cannon.

"With variable rates being as low as they are, many borrowers feel they have nothing to lose by watching and waiting to see if they go any lower."

Loans.com.au reports that a "significant portion" of its customer base is on a rate-linked loan product, so automatically received some benefit from last week's cash rate cut.

"For those who didn't get the rate cut automatically, we are passing on the full rate cut to ensure we are still at the pointy end of the market," said Cannon.

Loans.com.au estimates that the rate cut drop would lower monthly repayments by around $44 per month on a $300,000 loan.

The lender notes that their rate is 1.42% per annum lower than the Commonwealth Bank's standard variable home loan rate.