Lower mortgage rates possible despite RBA hold: 1300HomeLoan

Borrowers can secure lower interest rates despite the Reserve Bank of Australia keeping its official rate on hold because of the cutthroat competition among lenders, says mortgage broker network 1300HomeLoan.

The RBA maintained its cash rate at a record low of 1.5 per cent earlier this week, but 1300 HomeLoan managing director John Kolenda said due to the intense competition between lenders, borrowers don't need to wait for the RBA to make a move.

“While the RBA's cash rate remains unchanged, variable and fixed interest rates offered by the banks are continuing to tumble,” he said.

“There is a great opportunity in the current lending climate to get a further rate cut independently of an RBA decision and save money.”

Kolenda suggested that variable home loan interest rates should start at three percent and anybody paying more than four per cent, including fixed rates, was paying too much.

He attributed the higher payments due to the repricing over the last six months.

“I suspect many banks are considering future repricing opportunities as they face further pressure from funding costs, additional compliance costs and pressures of return on equity for their shareholders,” he said.

“The good news though for consumers is that any future rate rises will be minimal and they can count on the low interest rate climate to continue for many years.”