March Rates Are on Hold, Still Borrowers Set to Be Better Off in 2015
According to mortgage comparison website, the RBA’s February rate cut will save the average borrower around $700 over the course of 2015
As the interest rates are kept on hold in March, RateCity analysed that the average standard variable rate has dropped to 5.07 per cent this year – the lowest in 60 years – as a result of industry-wide rate cuts.
“RBA’s February rate cut of 0.25 percentage points was “big news as we hadn’t seen a rate move in around 18 months prior”, said Peter Arnold – RateCity’s financial analyst.
He further added, “Since then, we’ve seen the majority of lenders – 77 out of 100 in the RateCity database – pass on that cut in full, and even nine lenders have moved to pass on more than that”.
Calculations made by RateCity how that February’s rate cut represents a saving of around $700 over the course of 2015 for borrowers with a $300,000 home loan.
For residents of Sydney and Melbourne, the savings will be close to double that. Mr Arnold said, “While a rate cut is good news for borrowers with variable loans, they need to not only remember how much their lender has cut rates by, but the actual rate they are paying”.
“There’s a big difference between an average rate and some of the lowest rates, and that’s where you’re going to get the big savings”, he said.
News Source: http://www.theadviser.com.au/breaking-news/31562-borrowers-set-to-be-better-off-in-2015-despite-march-rates-hold