Aussie Home Loan: interest rates
Home loan interest rates have been falling over the past three months. Once at record high levels, struggling home owners are finally getting some welcome relief.
Aussie Home Loans dropped its standard variable mortgage interest rate by 40 basis points following the announcement by the Reserve Bank of Australia (RBA)to cut official rates by 75 basis points. This latest cut comes on top of last weeks 50 basis point reduction. The rate change is effective for new and existing borrowers already and is hoped to increase competition in the home loan market.
The RBA has cut official cash rates three times in as many months, but banks do not necessarily pass on the savings to home owners. Some lenders were faster than others to pass on the reductions, while only a handfull passed on the full amounts. The reductions started in September, when the RBA cut rates by a modest 0.25 per cent. When this did little to stimulate a slow economy or boost housing markets, the bank slashed on full per cent off official rates in October. In November, rates fell again, this time by 0.75 per cent, and many economists predict a large cut again in December and into the new year.
Non-bank lender Aussie Home Loans offers a very competitive variable home loan rate, but borrowers should consult a mortgage broker before making any financial decisions that will affect their property.
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