Some of the major Australian banks are set to cut the interest rates on variable home loans, but there is a catch.
Earlier this year, after the Reserve Bank of Australia (RBA), lifted the cash rate, the majority of the banks in the country lifted interest rates on home loans.
But now, the banks are inclined to cut the variable home loan rates in a bid to ease the pressure on homeowners.
Australia’s largest bank Commonwealth Bank of Australia (CBA) announced the deduction on variable home loan interest rates by 0.15 per cent on Thursday.
Whereas, Macquarie Bank cut its variable home loan rates by up to 25 basis points last week, while ANZ made a similar move back in May.
The deduction in home loan rates must have delighted the homeowners and home buyers, but RateCity research director Sally Tindall thinks it’s a catch by the banks and is reserved for new customers.
“The new home loan interest rates are reserved for new customers and not for the existing,” she told news.com.au.
“The catch for this move is to allure new customers, what these cuts show is that competition in the variable home loan market is still as hot as ever, despite the RBA cash rate hikes.”
This is disappointing news for the existing customers as the new ones are offered interesting rates amid the increased cash rates in the country.
Ms. Tindall thinks the customers can raise their voices or could go with other options.
“If your bank is offering lower rates to new customers, pick up the phone and ask them where their loyalty lies,” she said.
“If they don’t budge, it could be time to pick up your mortgage and take it to a lender willing to give you a competitive rate.”
The RBA is set to increase the cash rate next Tuesday, it will be the third time since May.
It is expected that the RBA would continue to increase the rates to slow down inflation in the country.
