Bet each way on rate moves


In­ter­est rates are ris­ing and fall­ing as lenders fight for new cus­tomers, writes IT’S the great rates race, and mil­lions of Aus­tralian mort­gage cus­tomers risk be­ing left be­hind.

Vari­able home loan in­ter­est rates are mov­ing in both di­rec­tions as lenders jos­tle for po­si­tion, mak­ing now more im­por­tant than ever to check your mort­gage.

Re­search by com­par­i­son web­site found that more than a dozen smaller and mid-sized lenders in­creased vari­able rates last month, fol­low­ing the lead of ma­jor banks West­pac, ANZ and the Com­mon­wealth Bank.

How­ever, a hand­ful of lenders an­nounced vari­able rate cuts, in­clud­ing HSBC, on­line lender Tic Toc,and Com­mBank, which low­ered its ba­sic vari­able home loan by a quar­ter of a per­cent­age point to 3.89 per cent.

Mozo direc­tor Kirsty La­mont said the rate cuts in­di­cated that com­pe­ti­tion was heat­ing up as the mort­gage mar­ket cooled down.

“You could be for­given for think­ing lenders have the yo-yo out on rates at the mo­ment,” she said.

“We are see­ing some lenders make tac­ti­cal of­fers to at­tract the right buy­ers, typ­i­cally owner-oc­cu­piers with low loanto-value ra­tios.”

Lenders were fall­ing over them­selves to sign up owner- oc­cu­piers who had built at least 20 per cent eq­uity in their homes, Ms La­mont said.

“Check your loan-to-value ra­tio and if it’s 80 per cent or be­low, start com­par­ing rates and push for a bet­ter deal,” she said. direc­tor of re­search Sally Tin­dall said a na­tional slow­down in mort­gage growth was forc­ing many lenders to ag­gres­sively chase new busi­ness, while oth­ers were lift­ing in­ter­est rates.

“It is a very unique time in the home loan mar­ket,” Ms Tin­dall said.

She said Com­mBank had been cut­ting rates to get new cus­tomers through the door, but “their of­fer was only for new cus­tomers”.

“Now is the most im­por­tant time to take stock of your home loan,” Ms Tin­dall said.

Bor­row­ers should check if their lender was of­fer­ing a lower mort­gage in­ter­est rate to new cus­tomers, she said.

“If it’s lower, call them up and ask them to match it. If they don’t match it, start con­sid­er­ing re­fi­nanc­ing.”

Other lenders are find­ing new ways to de­liver record low mort­gage rates.

RateCity has fa­cil­i­tated a one-week deal be­tween Re­duce Home Loans and Get­cred­ to drop Re­duce’s 3.44 per cent vari­able mort­gage rate to 3.39 per cent for peo­ple with ex­cel­lent or very good credit scores.

Ms Tin­dall said that the idea stemmed from Aus­tralia’s new com­pre­hen­sive credit re­port­ing regime.

“Fi­nally the banks are pass­ing on peo­ple’s full his­tory to credit agen­cies, and peo­ple now can more proac­tively im­prove their credit score. Events like this are good for peo­ple with good credit scores.”

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