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AMP Bank and Bendigo Bank are among the latest lenders to reduce their home loan rates following the Reserve Bank’s second consecutive cut to the cash rate.
Last week, the Reserve Bank of Australia (RBA) lowered the official cash rate to a new record low of 1 per cent, marking the second month in a row in which the cash rate had moved – after nearly three years of inertia.
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The adjustment provoked an immediate response from the mortgage market, with several lenders, including the big four passing on the cut.
AMP Bank, Bendigo Bank, MyState Bank and P&N Bank are the latest non-majors to reduce their home loan rates.
AMP
AMP Bank will reduce interest rates across all variable rate home loans by 20bps and cut its two and three-year fixed rate home loans by up to 53bps, effective 22 July.
AMP Bank CEO Sally Bruce said the lender had considered the impact of lower rates on its deposit customers before opting not to pass on the full 25bps cut, which the bank did pass on in June.
“To support Australian savers, AMP Bank will reduce the base rate of its flagship savings offer, the AMP Saver Account, by only 20bps, effective 15 July, and will also retain our competitive 2.75 per cent introductory rate on this product for new and existing customers,” Ms Bruce said.
“We are managing our business in a very active market, and decisions like this are considered carefully and thoroughly.
“We remain committed to providing competitive rates for our new and existing customers and [our] decision has been influenced by a continued elevation in costs as well as a desire to balance the interests of home owners and savers.”
AMP’s home loan rates will start from 3.29 per cent when the changes come into effect on 22 July.
Bendigo Bank
Bendigo Bank will reduce variable rates across all of its owner-occupied home loans by 20bps, while decreasing rates across all of its investment home loans by 15bps.
The bank’s managing director, Marnie Baker, commented: “We consider a variety of factors when deciding on any rate movements.
“[Our] announcement aims to provide a competitive rate whilst carefully taking into account the diverse interests of all our stakeholders, the performance of our business, our market competitiveness, market conditions and importantly, the strength of our national network, which supports the prosperity of communities across the country.”
Bendigo’s rates will start from 3.39 per cent when changes become effective from 29 July.
MyState
MyState Bank has decreased its variable home loan rates for borrowers paying principal and interest by 20 bps and by 10bps for borrowers paying interest-only.
The changes are effective 15 July for new customers and 29 July 2019 for existing customers.
MyState Bank’s general manager of banking, Tony MacRae, stated: “We have worked to keep holding rates as high as we can for our deposit customers – those customers saving for their first home or funding retirement. With low wage growth, our customers have to work hard to save. We want to make their savings work hard too.
“With rates as low as this country has never seen before, decisions such as these are difficult. We believe this combination of pricing changes delivers a fair balance of outcomes for both savers and borrowers.”
Once the changes take effect, MyState’s rates will start from 3.58 per cent.
Citibank
Citibank has lowered rates on all residential variable rate home loan products by 18bps, excluding rates for lines of credit facilities, which have been cut by 15bps.
Citibank’s changes are effective from 23 July.
P&N Bank
Western Australia-based lender P&N Bank has decreased its rates by up to 18bps for new and existing home loan customers, effective from 23 July.
P&N general manager, member experience, Anna Pearce, commented: “In passing on the 18bps reduction to our home loan, P&N customers have access to one of the most competitive offers in market when comparing like for like loans.
“With the record-low interest rate environment, P&N’s lower lending rates provide the opportunity for existing and new customers to save money.
“I encourage everyone to compare like for like product features and not just the advertised rates when reviewing their existing lending arrangements to optimise their personal financial situation.”
P&N’s rates will start from 3.63 per cent when the changes come into effect.
In total, almost 50 lenders have reduced their home loan rates following the Reserve Bank’s decision, with smaller credit providers, including Australian Military Bank, Bank Australia, Bank of Us, BCU, Coastline Credit Union, CUA, Freedom Lend, Hunter United, Macquarie Credit Union, People’s Choice Credit Union and Quodos Bank, dropping rates by up to 25bps.
[Related: Mortgage rate cuts continue]
