One lender has announced new fixed rates for specialist borrowers, while a non-major bank has reduced its variable rates by up to 40 basis points.
Specialist lender Bluestone’s three-year fixed rate is now 30 basis points lower than the current variable rate, while its two-year fixed rate has been cut by 20 basis points.
Bluestone CEO Campbell Smyth said fixed rate loans make up between 15 and 20 per cent of the prime mortgage market, but have traditionally been unavailable to specialist borrowers who have faced limited choices in loan structures.
The thinking in the specialist lending space has been that these types of borrowers would not benefit from fixed rates, as their goal is to refinance into a prime mortgage as soon as possible, Mr Smyth said.
“The reality is that just the opposite is true. Fixed rates are more suited to specialist borrowers in some ways. A fixed rate means a fixed payment, which gives borrowers certainty and allows them to choose the period of time in which they intend to get back into a position to re-enter the prime market,” he said.
Meanwhile, ME announced yesterday that its Basic Home Loan with maximum LVR of 80 per cent has been cut by 40 basis points for investors and 20 basis points for owner-occupiers to 4.24 per cent.
ME's Flexible Home Loan with Member Package has been reduced by 6 basis points for owner-occupiers and investors to 3.89 per cent and 4.09 per cent respectively. These offers apply to loans with a maximum LVR of 80 per cent.
Furthermore, the bank’s Flexible Home Loan with Member Package for owner-occupiers and investors with an LVR band of 80 to 90 per cent has been reduced by 15 basis points to 4.09 per cent and 4.29 per cent respectively.