Banks will likely reduce rates, survey
Property investors might not see the entire 50 basis point cut passed onto them by the major banks, but still may see significant reductions, according to a leading mortgage broker.
A new survey saw just eight per cent of Loan Market mortgage brokers believing that lenders will match the Reserve Bank of Australia’s interest rate reduction, even while the majority believed a portion of the reduction would be seen.
Loan Market’s corporate spokesperson Paul Smith said that 51 per cent of brokers responded that rates would be decreased between 31 and 45 basis points.
A further 36 per cent believed the decrease would span from 16 to 30 basis points.
“Two per cent of brokers tipped no movement whatsoever while three per cent predicted a miserly one to 15 basis point reduction,” Mr Smith said.
“The major banks are unlikely to pass on the full 50 basis point reduction from the RBA due to the fact that the other variables influencing cost of funds have not dropped in line with the RBA.
“However, the majority of our brokers say a significant rate reduction is on the cards for home-owners, and that’s good news,” he said.
The Bank of Queensland recently passed on a 35 basis point decrease, and property owners also saw similar reductions from NAB and the Commonwealth Bank yesterday, with 32 and 40 basis points cut respectively.
The survey asked 231 Loan Market mortgage brokers to respond to the multiple choice question: “With the RBA lowering rates by 50 bps, how do you expect the major banks to respond?”.