Athena, Reducing Home Loans Among The First To Cut Rates

0


The official spot rate was cut to an all-time low of 0.10% in an attempt to speed the economy out of recession. While this is likely to see savers bearing the brunt of lower rates, the upside is that borrowers may be able to pay less in mortgage payments. In fact, some lenders have announced instant rate cuts.




Will banks pass on RBA cuts in November 2020? Image source: Rose Makin, Shutterstock.




Almost seven months after its latest move, the Reserve Bank of Australia (RBA) board decided to cut the official cash rate by 0.15 percentage points to an all-time low of 0.10% Tuesday, November 3, as was widely anticipated.




This is the first time the central bank has made a ‘micro-cut’ of less than 0.25 percentage point, the announcement aimed at supporting Australia’s economic recovery from the pandemic while maintaining the cash rate above 0%.




The RBA will also adjust some of its other levers that influence the functioning of the Australian financial system. It will reduce its three-year bond target and the rate on its term financing facility to 0.1%, and reduce the interest rate on foreign exchange settlement balances to zero. It will also buy $ 100 billion in government bonds over the next six months.




RBA Governor Philip Lowe said Australia was on the path to economic recovery, but high unemployment was an “important national priority” and the bank would do everything possible to support creation jobs.




What Does Lower Cash Rate Mean for Home Loan Rates?




Many homeowners and potential borrowers will now be watching their lender’s reaction to the RBA’s cash rate call, as they may be able to secure a cheaper home loan interest rate.




↓ Read on to see if your bank is on our list of lower rate lenders








Another lender, Athena, lowered its variable mortgage rates on the same afternoon as the RBA announced, for homeowners and investors, a total reduction of 0.15 percentage points in the rate at cash. New and existing customers are expected to pay the new rates, which will now start from 2.19% (comparison rate 2.19%) on its CelebRATE product for borrowers with a deposit of at least 40%.




Likewise, Reduce Home Loans instantly lowered some of its variable rates, bringing the lowest home loan rate in our records to 1.77% (comparison rate 1.83%) on its Rate Cutter loan, also for borrowers with at least a 40% deposit.




Canstar research analysts analyzed the numbers and found that a hypothetical homeowner borrower paying our database’s average rate of 3.31% could save $ 321 per month and over $ 115,000 in total interest. by switching to the new low rate of Reduce (excluding fees and assuming the rates remain the same during this period) *.




Lenders cut rates all year round, with Canstar’s database showing 94 lenders cut variable rates on home loans in 2020 by 0.36 percentage points on average, bringing down the average rate in our database from 3.73% to 3.37% at time of writing (excluding reductions announced after or shortly before the RBA announcement). Fixed rates were cut by an average of 0.67 percentage points by 72 lenders.








Update: The Big Four banks passed on the fixed rate cuts, only to existing customers. See our coverage for details.








Which lenders have reduced mortgage interest rates so far?




The following lenders in Canstar’s database announced reductions in all or part of their interest rates on homeowner home loans just prior to or following the RBA’s cash rate decision, listed in alphabetical order (List updated at 11 a.m. AEDT on November 13, 2020):




  • 86 400: Declines of 0.10 percentage point in variable loans and 0.09 to 0.32 percentage point in fixed rate loans
  • CHA: cuts between 0.22 and 0.70 percentage points in fixed rates
  • Athena: 0.15 percentage point cuts in variable rate loans
  • Australian Military Bank: reductions between 0.15 percentage point and 1 percentage point in construction and fixed-rate loans
  • Aussie: 0.20 percentage point reductions in variable loans and 0.07 to 1.25 percentage point reductions in fixed loans
  • Auswide Bank: reductions of between 0.10 and 0.35 percentage points in variable and flat-rate rates
  • ANZ: cuts between 0.20 and 0.40 percentage points in fixed rates
  • Bank of Queensland: cuts between 0.16 and 0.55 percentage points in fixed rates
  • Bendigo Bank: cuts between 0.05 and 1.10 percentage points in fixed rates
  • Citi: 0.10 to 0.20 percentage point cuts in fixed rates
  • Commonwealth Bank: reductions of between 0.10 and 1 percentage point in fixed rates
  • AUC: cuts between 0.40 and 0.52 percentage points in fixed rates
  • Delphi Bank: cuts between 0.15 and 1.20 percentage points in fixed rates
  • Freedom loan: 0.20 percentage point cuts in variable rates
  • Gateway bank: decreases of 0.05 percentage point in variable rate loans and 0.10 to 0.30 percentage point in fixed rate loans
  • Geelong Bank: 0.10 percentage point cuts in variable rates
  • Homestar Finance: 0.15 percentage point cuts in variable and fixed rates
  • Homeloans.com.au: 0.15 percentage point cuts in variable rates
  • Horizon Bank: 0.20 percentage point cuts in fixed rates
  • HSBC: cuts between 0.10 and 0.21 percentage points in fixed rates
  • ING: cuts between 0.05 and 0.50 percentage points in fixed rates
  • Macquarie Bank: cuts between 0.10 and 0.25 percentage points in fixed rates
  • ME: 0.15 percentage point cuts in variable rates
  • MyState Bank: reductions between 0.20 percentage point and 1 percentage point in variable and fixed rates
  • National Bank of Australia: cuts between 0.10 and 0.81 percentage points in fixed rates
  • Newcastle permanent: cuts of 0.01 to 1.11 percentage points on fixed rates
  • P&N Bank: reductions of up to 0.10 percentage point on variable loans and up to 0.96 percentage point on fixed loans
  • Credit union of choice: decreases of 0.10 to 0.85 percentage point on flat rate plans and 0.75 point on standard plans
  • Pacific Mortgage Group: decreases between 0.10 and 0.16 percentage points in variable rates
  • Qudos Bank: decreases of between 0.09 and 0.65 percentage points in variable rates
  • RACQ Bank: cuts between 0.25 and 0.40 percentage points in fixed rates
  • Reduce home loans: decreases of between 0.10 and 0.20 percentage points in variable rates
  • Reliance Bank: 0.10 to 0.34 percentage point cuts in fixed rates
  • Resi: 0.15 percentage point cuts in variable rates
  • Summerland Credit Union: cuts between 0.05 and 0.50 percentage points in fixed rates
  • UBank: 0.15 or 0.19 percentage point cuts in variable and fixed rates
  • Westpac: cuts between 0.10 and 0.80 percentage points in fixed rates
  • Yellow brick road: 0.15 percentage point cuts in variable rates




It might be helpful to check with all lenders that you are considering confirming which particular loans these rate reductions may apply to and whether the reductions are available to new customers, existing customers, or both.








How much could you save with reduced refunds?




Canstar’s analysis found that if the average variable rate on a loan amount of $ 400,000 (3.37%) decreased by 0.15 percentage points, monthly repayments would decrease by $ 33, or $ 396 per year. .




For borrowers with a loan of $ 1 million (current average rate of 3.34%), calculations show it could save up to $ 989 in a year.




Canstar researchers found that the impacts of a 0.15 percentage point reduction on various loan amounts would be as follows:




  • $ 300,000 (current average rate of 3.38%): $ 25 monthly repayment reduction, saving $ 297 per year
  • $ 400,000 (current average rate of 3.37%): monthly repayment reduction of $ 33, saving $ 396 per year
  • $ 500,000 (current average rate of 3.35%): $ 41 monthly repayment reduction, saving $ 495 per year
  • $ 600,000 (current average rate of 3.35%): $ 49 monthly repayment reduction, saving $ 594 per year
  • $ 700,000 (current average rate of 3.35%): $ 58 monthly repayment reduction, saving $ 693 per year
  • $ 800,000 (current average rate of 3.35%): monthly repayment reduction of $ 66, saving $ 792 per year
  • $ 900,000 (current average rate of 3.34%): $ 74 monthly repayment reduction, saving $ 890 per year
  • $ 1 million (current average rate of 3.34%): reduced monthly repayments by $ 82, saving $ 989 per year




Source: www.canstar.com.au – 10/29/2020. * Average homeowner variable rate based on principal and interest loans available for the specified loan amount and 80% of the LVR in Canstar’s database, excluding loans to purchase a home. first home only and at introductory rate. Monthly repayment calculations based on principal and interest repayments over a 30-year loan term. The calculations assume that the rates remain the same after the 0.15 percentage point cut.















































































































































Share.

Comments are closed.