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The high-LVR lender has cut its standard variable mortgage rate, becoming the latest lender to reprice its offering following the Reserve Bank’s monetary policy adjustment.
HomeStart Finance has announced that it will decrease its standard variable mortgage rate by 25bps to 5.14 per cent, effective from 20 June.
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HomeStart becomes the latest lender to cut its home loan offerings following the Reserve Bank of Australia’s (RBA) decision to decrease the official cash rate to a new record low of 1.25 per cent.
Earlier this week, the lender’s Western Australian peer, Keystart Home Loans, chose not to pass on the full 25bps cut, opting instead to reduce its standard variable rate by 19bps.
Keystart said that its decision was based on the average standard variable rate offered by the four major banks.
“Given the low deposit nature of the lending we provide, our interest rates policy enables us to manage our lending risk responsibly whilst remaining focused on our vision,” the lender noted.
Both HomeStart and Keystart were founded as part of initiatives of the South Australian and Western Australian state governments, with the primary purpose of assisting first home buyers (FHBs) by offering low-deposit home loan products.
Many pundits are expecting the recent wave of mortgage rate cuts to further fuel home loan demand from FHBs, which have also benefited from the continued fall in dwelling values.
According to the latest Lending to Households and Businesses data from the Australian Bureau of Statistics, FHB market share increased to 18.2 per cent in April, up from 17.6 per cent 12 months prior.
[Related: MyState announces ‘equitable’ rate cut]
