One lender takes on banks

Since the Reserve Bank made its somewhat surprising decision last week not to increase the official cash rate, nothing much has happened.The three key trends from the previous week are that:

• Main bank lenders have kept their rates the same. Now most banks are offering nearly identical standard offerings.
• Non-bank lenders have continued to increase their medium term fixed rates. These increases are really just a catch up to the changes that the banks made in previous weeks.
• The eye-catching event is that non-bank lender Cairns Lockie made a bit of noise with the decision to drop its two-year rate 24 points to something less than the banks.

Cairns Lockie director James Lockie says the new rate of 8.09% is less than the standard offerings from the big five trading banks."There has been a lot of talk and advertising, about rates that cannot be beaten", he said "well, we just have."Cairns Lockie plans to run this campaign until the end of the year. A couple of its key messages are that there are alternatives to the banks and also it is an experiment to see how big an issue price is to borrowers."The Cairns Lockie floating rate has been amongst the lowest in the market for a number of years, and significantly lower than the rate offered by the five trading banks. It is time that borrowers had available a low fixed rate alternative too."In terms of where rates may head in the near term future borrowers could anticipate a slight easing.Rates were increasing prior to the Reserve Bank announcement as wholesale rates had been rising and margins were being squeezed.Since last Thursday wholesale rates have come back somewhat which could encourage some lenders to cut rates.In the comprehensive Good Returns mortgage rate table there are two changes this week. We have added the biggest credit union in the country, Credit Union Baywide, and there has been a change to the way United’s rates are expressed.United bought Equitable’s home loan book for an undisclosed sum earlier this year. When Equitable was in the table Good Returns ran two lines of data, one for its loans which were funded by AMS and other for its Origin funded loans.Now United has two sets of rates. Today’s table includes just the Origin rates which are lower than the AMS ones.