Login
ISCOVER
The Reserve Bank’s decision to cut the cash rate in February will save the average borrower around $700 over the course of 2015, according to a mortgage comparison website.
Despite no movement on the cash rate by the RBA on Tuesday, RateCity calculated that the average standard variable rate has dropped to 5.07 per cent this year – the lowest in 60 years – as a result of industry-wide rate cuts.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
RateCity’s financial analyst, Peter Arnold, said the RBA’s February rate cut of 0.25 percentage points was “big news as we hadn’t seen a rate move in around 18 months prior”.
“Since then, we’ve seen the majority of lenders – 77 out of 100 in the RateCity database – pass on that cut in full, and even nine lenders have moved to pass on more than that,” he said.
RateCity’s calculations show that February’s rate cut represents a saving of around $700 over the course of 2015 for borrowers with a $300,000 home loan.
For people living in Sydney and Melbourne, the savings will be close to double that.
Mr Arnold said that while a rate cut is good news for borrowers with variable loans, they need to not only remember how much their lender has cut rates by, but the actual rate they are paying.
“Don’t just trust your bank to pass on the RBA cut – get out there and search for a better deal,” he said.
“There’s a big difference between an average rate and some of the lowest rates, and that’s where you’re going to get the big savings.”
