Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Tuesday, 10 March 2015

Lowest variable rates in 60 years

RateCity has calculated that the average standard variable mortgage rate (SVR) has declined to its lowest level in six decades as result of industry-wide interest rate cuts.

"The Reserve Bank’s decision to cut the cash rate in February will save the average borrower around $700 over the course of 2015, according to a mortgage comparison website.

Despite no movement on the cash rate by the RBA on Tuesday, RateCity calculated 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.

RateCity’s financial analyst, Peter Arnold, said the 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”. 

“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,” he said.

RateCity’s calculations show 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 people living in Sydney and Melbourne, the savings will be close to double that."