ASIA: Non-majors continue to cut rates on mortgages

Several of non-major lenders, namely Virgin Money, and Bank of Sydney, announced a rate cut to their fixed and variable rates over the last week. This followed previous rate cuts announced by other non-majors – ING DIRECT, Macquarie and Bankwest, who cut their fixed home loan rates or principal and interest loans for owner occupiers in June. Virgin Money has cut the variable and fixed rate on its new Reward ME Home Loan for a range of owner occupied loans by 5 basis points. This is effective from 13 July and applies for loans above $750,000 with an LVR (loan to value ratio) of up to 80% and loans up to $499,999 with an LVR between 80-90%. Meanwhile, investment variable rates have been cut up to 15 basis points depending on the LVR of the loan. Additionally, Virgin Money also cut its 3 year fixed rates for both owner occupied and investment loans by 20 basis points. Bank of Sydney have opted to reduce the variable rate on its owner occupied Expect More Home Loan by 9 basis points but only for loans in Metro locations of LVR up to 70%. RFi Group data shows that 16% of mortgage holders would switch because of a rate difference of 40 basis points or less. This indicates that these rate changes are unlikely to influence many consumers holding their mortgage with one of the majors to switch.


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