Fixed Rate Cuts Continue
As a result of the recent downward movement in the bond and swap markets, another swag of lenders have cut their fixed rate home loans.
Suncorp/Metway, Adelaide Bank, Collins Securities, Illawara Credit Union, and Challenge Bank have all reduced their fixed rates in the 1 to 5 year range with cuts of up to 30 basis points.
Of these we noted with interest the comments of Collins Securities managing director Mr. Rob Emmett, that their fixed rate products do not have switching fees (usually around $300) and they also come with the ability to make extra repayments. Mr Emmett advises that on their Prime Select fixed rate loans borrowers are able to make extra repayments of up to $10,000 p.a and on Resi Credit Fixed rate loans up to $20,000 p.a without incurring a penalty.
We believe that borrowers looking for a fixed rate product would find these features very appealing. This clearly illustrates that intense competition amongst lenders is making them come up with new features on traditionally very rigid products in order to attract a greater market share and retain existing customers.