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In a sign that competition is starting to re-emerge in the mortgage market, Homeloans has reduced the interest rate on a handful of its low loan to value ratio (LVR) products.
Speaking to The Adviser, Homeloans general manager third party distribution Tony Carn said the mortgage originator would lower the interest rates on its flagship range of Premium home loan products by 10 basis points.
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“Effective from Monday 1 March, we will lower the interest rate on our Premium full doc loan to 5.74 per cent p.a. for LVRs 65 per cent or less,” Mr Carn said.
“We will also be reducing the interest rate on our Premium low doc product to 6.19 per cent for LVRs less than 60 per cent.”
Mr Carn said the company’s decision to lower its interest rates comes on the back of independent research which found 48 per cent of all people considering buying a property within the next 12 months are existing home owners or investors.
“These property buyers have already built up equity, which means there is a large market out there for low LVR products,” he said.
“This is our way of helping brokers reward consumers who have built up equity.”
The discounted interest rates, which will only apply to new Homeloans borrowers, are aimed to help position the mortgage originator as a sound alternative to the majors.
“We want to capitalise on the anti-bank sentiment that is currently hovering in the air, and this initiative will help us do just that,” he said.
Yesterday, Homeloans posted a net profit after tax increase of 75 per cent on the corresponding period.
The lender had a net profit of $4.6 million for the period ending 31 December 2009.
