Published: August 31, 2008 - 08:53 PM
Wizard Home Loans has today ambushed the big 4 banks by cutting its home loan rate by a quarter of a percent ahead of Tuesday's Reserve Bank meeting.
Speculation is rife that the Reserve Bank will in fact decrease the official interest rate on Tuesday following a slow-down in the economy. Pressure is mounting on the major banks to decrease their mortgage rates if the Reserve Bank does drop the official rate with the National Australia Bank already announcing earlier this month that it would pass on any official interest rate cut to mortgage holders.
The Treasurer Wayne Swan has increased the pressure on the banks to pass on any rate fall by stating that the banks should decrease their variable home loan rates by more than the central bank's decrease after they had previosuly increased their home loan rates by more than previous Reserve Bank increases.
A decrease in the Reserve Bank's official rate will go some way to ease pressure on households struggling to cope with an environment of rising living costs. Cheaper home loans being offered by the major banks Westpac, NAB, Commonwealth, ANZ and St George will lead to cheaper home loan rates for mortgage holders on variable rates or those homeowners shopping around for a better mortgage deal.
David Power of ShopAround.com.au said that "If homeowners shop around for a cheaper home loan rate they can save thousands of dollars over the life of their mortgage. Wizard has today taken a jump on the major banks and have for a few days at least an edge if you compare their interest rates to the major banks interest rates and home loans. It will be no surprise if the major banks follow suit and drop their home loan rates this week."
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