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Brokers are being encouraged to review the lending landscape before the February rate decision, as more lenders reduce their rates out of cycle.
With all eyes on the Reserve Bank of Australia (RBA) when it meets to discuss monetary policy next week (17 and 18 February), brokers are being encouraged to be proactive in finding the best deal for their clients, especially as more lenders announce rate reductions in anticipation of a rate-cutting cycle.
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Speculation that the RBA’s February meeting will deliver the first interest rate cut since November 2020 has been rife in recent weeks, with all four majors forecasting a cut at the central bank’s next announcement.
A number of lenders, including Macquarie Bank, Westpac and NAB, have also reduced the rates on their fixed-term loans ahead of the RBA meeting.
Several non-bank lenders have also announced rate reductions outside a rate-cutting cycle as part of broker campaigns.
For instance, Bluestone Home Loans (Bluestone) recently announced it would be offering the broker channel a 0.25 per cent interest rate discount on eligible loads between 10 and 28 February 2025 as part of celebrations for the non-bank lender’s 25th anniversary.
RedZed is also offering rate discounts through its Valentine’s Day “With love, from RedZed” campaign announced today (14 February 2025).
The self-employed lender has lowered select rates and fees across its residential, commercial and SMSF ranges, with reductions applying to most interest rates on SE Prime full doc and alt doc residential loans, select residential specialist loans, and its SMSF residential and commercial loans.
Best interest
Bluestone chief commercial officer Tony MacRae told The Adviser that brokers should be proactive and stay ahead of campaigns and policy changes, with market movement into a rate reduction cycle likely to result in greater demand from borrowers as purchases move back into the market and those looking for a deal shop around to refinance.
“Lenders such as Bluestone allow brokers choice and the ability to find solutions for customers that they may have thought were not able to borrow,” he said.
However, the rate on a loan is just part of the story.
“Just because you can doesn’t mean you should,” MacRae said.
“Lower rates mean greater borrowing capacity, but brokers should be diligent in ensuring they are placing customers into loans they can afford today and well into the future.”
Ultimately, the most important thing is understanding the borrower’s needs.
“Regardless of rate, it is always important that brokers spend the time to understand the customer’s goals and objectives with any borrowing arrangement,” MacRae said.
“Ensuring these are met beyond the lowest rate will ensure the customer is well placed to achieve their long-term financial needs.”
[Related: Lenders begin reducing fixed rates ahead of RBA meeting]
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