More Lenders cutting rates

More lenders join rate cutting frenzy – Article Quotes Justin Doobov

Article from Australian Broker News By Adam Smith | 10/08/2011 5:30:00 AM

St. George and ING Direct have joined the wave of fixed rate cuts, and an MPA Top 100 Broker has predicted an RBA cut may not be far behind.

Following moves yesterday by CBA and Westpac to make cuts to their fixed rate products, Westpac subsidiary St. George and second tier ING Direct have also announced discounts.

St. George has cut 20bps from its two and three-year fixed rate loans, following on from a 10bp cut at the end of July. The price decreases bring the bank’s two-year fixed rate to 6.69%, and its three-year product to 6.79%.

ING Direct has responded to moves from the other lenders with cuts to its entire stable of fixed rate products, with its one-year rate at 6.59% and its five-year product at 6.99%.

MPA Top 100 Broker Justin Doobov of Intelligent Finance said the move portends an RBA rate cut, and betrays uncertainty in the global economy.

“The market has now started to price in reductions of the cash rate in the coming months, hence the lenders reducing their fixed rates according to market indicators. Some of the extremely low fixed rates have further indicated that the market expects the cash rate reduction the next time the RBA meets, or even earlier,” he said.

Doobov, who regularly advises clients to fix part of their loans, nevertheless urged consumers to avoid the temptation of chasing cheap fixed rates.

“Choosing to fix your loans interest needs to be done in relation to your future needs and requirements. Don’t just fix the interest rate because it is cheap, fix it to give you certainty about your monthly repayments,” he commented.

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