Brokers are being warned that the rate war could be coming to an end.
Variable rates have now fallen to 4.48 per cent, and brokers may be running out of time to capitalise on the continued run of rate cuts.
Online lender Ubank recently undercut its competitors by reducing its variable rate to 4.48 per cent from 4.54 per cent.
2014 has seen a continual cutting of rates, in just the last two months Suncorp, Adelaide Bank, Bank of Melbourne and Bankwest are just some of the institutions to join in.
Kim Cannon from Firstmac spoke for many when he told The Adviser he wasn’t sure if rates could fall any further.
“A couple of months ago, I thought rates had bottomed. So let’s wait and see – it’s all impacted by what goes on in the world,” he said.
Troy Phillips from wholesale funder MAS also spoke to The Adviser, and said variable rates were almost certainly near the bottom, and he couldn’t imagine any lender being able to have enough margin to drop rates below 4.45 per cent.
“Retention is key. When your margins are so fine, you’ve got to keep the customer. If you’re attracting people who are shopping rates, what sort of customer are they?” he said.
Financing Property chief executive Peter Gywnne said the cuts wouldn’t last forever so brokers should take advantage of the current environment.
“Normally when you get a new deal, you give them the best deal, so it’s more about existing clients and seeing how we can save them money,” he said.
Mr Gywnne told The Adviser it’s a good time for clients to negotiate a new deal.
“Normally when you get a new deal, you give them the best deal, so it’s more about existing clients and seeing how we can save them money,”