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On Tuesday (18 February), the Reserve Bank handed down its highly anticipated rate cut. What was the first cut in over four years, the meeting saw rates drop from 4.35 per cent to 4.10 per cent.
The majors followed suit with all four agreeing to drop rates in line with the RBA’s cut of 25 bps, from 28 February.
What followed was non-bank lenders Wave Money and Bluestone Home Loans that also decided to implement the full 0.25 per cent cut.
Now, more lenders are coming forward to join the others in enacting the new rates in full.
Following RedZed's Valentine's Day offer that saw reductions on select rates, fees and loadings, the non-bank lender announced yesterday that it will also be reducing variable interest rates by 0.25 per cent on its residential, commercial and SMSF loan products from 28 February, coinciding with the RBA's decision.
RedZed is also planning to reduce rates for existing customers and will communicate further details shortly.
“We hope these rate changes will encourage new brokers to consider us and explore RedZed’s offering. Once they do, we’re confident that they’ll enjoy the first-class service our onshore teams provide," said managing director Calvin Cordle.
“We also look forward to reconnecting with brokers who have previously lodged applications with us and helping them diversify and strengthen their businesses."
Pepper Money also announced it will be passing along the new recommended rate to its customers from 5 March.
What he described as “a step in the right direction,” Pepper Money CEO Mario Rehayem said this decision was crucial for struggling families.
“While many households continue to face financial challenges, today’s rate cut will help ease some of the pressure and provide much-needed relief. For a borrower with a $600,000 mortgage with the average interest rate of 6.1 per cent, this 0.25 per cent reduction could mean a decrease of approximately $96 in monthly repayments and approximately $1,156 in yearly savings. While it may seem like a modest saving, it can make a meaningful difference, especially when combined with other cost-of-living pressures,” said Rehayem.
"Many households have been managing tight budgets amid rising costs, and any reduction in repayments can make a meaningful difference. Ensuring borrowers benefit from this cut will help them regain some financial stability and confidence in their future planning.
“For mortgage brokers, now is the time to engage with clients and review their current loan. It’s important for brokers to be proactive and reach out to existing customers, help them understand what this rate cut means for them, and conduct home loan health checks to ensure they’re on the best possible rate.”
Meanwhile, Bankwest announced changes in line with the RBA decision. Each of its rates will be dropping by 0.25 per cent, with new totals of:
- Owner-occupiers: 8.75 per cent.
- Owner-occupiers – interest-only: 9.10 per cent.
- Investors: 9.40 per cent.
- Investors – interest-only 9.53 per cent.
BOQ is also implementing 0.25 per cent on variable home loans, effective 7 March. Firstmac is doing the same from 4 March, AMP Bank from 3 March, MA Money from 17 March, and Auswide Bank from 28 February.
Damien Hearn, the newly appointed general manager of Auswide Bank said: “Despite the spate of interest rate increases since November 2020, our borrowers have in the main managed their loans very well with our arrears well below our peers.
“Of course, cost of living is still a factor for many customers and our customer support teams are always available to assist borrowers who may experience difficulties in repaying their loans.”
The coming weeks could see more lenders follow suit and enact rate cuts. With some believing we should expect more cuts throughout 2025, home ownership may become a little easier for Aussies.
[Related: Lenders begin to drop rates after RBA cut]
