Over the past few months a major topic on this blog has been about interest rates rising: remember, the Reserve Bank increased the official cash rate earlier this month as well as in November and December last year, with predictions that there could be several more increases over the course of the rest of 2010. And as you’d expect, banks and other lenders generally followed suit, with some major banks raising rates by even more than the Reserve Bank did.
But here’s the good news for those of you looking at mortgages at the moment: not every lender is following this trend. Amazingly enough, at least a couple of lenders have actually lowered rates in the last few weeks, although you probably won’t be surprised to learn that it’s not the big banks that are doing so.
However, it is Australia’s biggest credit union, Credit Union Australia (CUA) which has reduced its interest rate on standard variable loans by a quarter of a percentage point to 6.37 per cent, which leaves it about half a percentage point below the average of the big four banks – and they say that come the end of April, this will be the lowest interest rate on the market.
At the same time, AMP Bank is cutting its rate too and it looks like Aussie Home Loans are about to return, with speculation that they’ll have a lower rate too. So it’s not all doom and gloom – even though interest rates are rising, there is still enough competition in the market to see some different rates around. We’ll have to wait and see if other banks and lenders follow this lead, despite all the speculation that rates are just going to get higher and higher.