Loans.com.au has doubled its number of home loan applications since it dropped its interest rate to 4.23 per cent following the Reserve Bank’s cash rate cut.
Kim Cannon, managing director of Firstmac – parent company of loans.com.au – said the response from borrowers has been “really heartening”, with an increase of more than 100 per cent in applications in a week.
“The RBA move has really shaken up the home loan market and prompted people to take a close look at their interest rate,” he said.
Mr Cannon said home loan customers have come to realise that they can get better value by seeking out alternatives to the major banks.
“They are refinancing in record numbers for a better deal, and they see the value of using a mortgage offset to save even more interest over the life of the loan,” he said.
“The majority of borrowers are opting for the offset facility and paying off their home sooner.”
Mr Cannon said that while loans.com.au offers competitive fixed rates, a majority of borrowers are still keen to stay with a variable rate loan.
“Some sectors of the market speculate that the RBA is not quite finished with cutting the cash rate, which would mean we could see another drop before the year is out,” he said.
“With variable rates being as low as they are, many barrowers feel they have nothing to lose by watching and waiting to see if they go any lower.”
Loans.com.au is an independently-owned, Australian online lender that does not operate in the third-party channel.