March update: RBA leaves rates on hold
The Reserve Bank of Australia has kept the cash rate on hold today, leaving it at 3 percent and unchanged since December.
However, borrowers haven’t had to wait for the RBA to cut the cash rate to benefit from rate reductions this year. RateCity found many financial institutions have cut rates out of cycle this year.
Four lenders lowered some of their variable home loan rates by as much as 0.20 percentage points last month.
Michelle Hutchison, spokeswoman for RateCity, said financial institutions are no longer waiting for a “green light” from the Reserve Bank to make changes to their interest rates.
“We are seeing more financial institutions than ever before moving their interest rates while the Reserve Bank leaves the cash rate on hold. It shows that the Reserve Bank appears to have less influence over institutions’ decisions, where previously they would wait for a “green light” from the Reserve Bank before moving their variable rates,” she said.
Don’t wait for the RBA – act now
Most borrowers don’t need to wait for the RBA to announce rate cuts in order to find savings on their home loans, though. By comparing home loans using a site like RateCity, many Australians with a variable rate home loan could find significant savings.
For instance, six months ago the lowest variable rate home loan (excluding intro deals) available through RateCity was by eMoney at 5.6 percent and now (at the time of writing) State Custodians offers the lowest rate at 4.99 percent.
Borrowers are urged to do their homework and shop around because by reducing your variable home loan rate by as little as a few percentage points could mean paying thousands of dollars less interest over the years.
“Australians could be missing out on hundreds – even thousands – of dollars in savings by not using RateCity.com.au regularly to compare products and keep track of interest rates. If you find a better deal, take this information to your lender and ask for a discount – even 0.05 percentage points could mean big savings in the long run.”