Firstmac passes full rate cut to consumers this May

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Half of Australia’s lenders may be stalling on passing the RBA’s rate cut to their consumers, but Australia’s largest non-bank mortgage lender Firstmac has decided to pass the full 0.25 per cent rate cut to its customers starting May 23. It will apply to all variable rate loans, including owner-occupier and investment loans.

According to Firstmac Managing Director Kim Cannon, they are pleased to be in the minority of lenders who promptly passed on the full benefit to their borrowers.

“It is disappointing that nearly two-thirds of Australian lenders have either failed to pass on last week’s RBA rate cut in full, or have not yet announced their response, leaving mortgage brokers in an awkward situation with their customers,” Cannon said.

Data from finder.com.au shows that only 49 per cent of the 74 lenders on its database have not yet announced any rate changes even a full week after the Reserve Bank’s announcement. Of those that have passed on the rate cut, only 26 lenders passed it in full, while 12 lenders decided to keep some of the cut for themselves.

Cannon thinks that Firstmac’s move would entice customers to switch to them, as it can potentially save them thousands of dollars.

“There is plenty of competition in the home loan market, and bank customers can see they could be saving money on interest if they chose another lender as well as getting straight answers about how much they will be paying,” he said.

“Bank customers who switch to a Firstmac home loan can save themselves tens of thousands of dollars, and years off their home loan.”

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