Greater cuts home loan interest rates by 70 points (0.7%)

The Greater Building Society today announced that it will decrease its standard variable home loan interest rate by 70 basis points (0.7%) to 7.55%.

The Greater's rate cut is more than those made by the four major banks since the Reserve Bank of Australia reduced official interest rates on Tuesday. The Greater's new rate is effective from tomorrow (November 7) for new borrowers and from November 15, 2008 for existing borrowers.

Chief executive Don Magin said customers with a $250,000 mortgage over 25 years would see their repayments fall by $115 a month.

He said the Greater had passed on as much of the rate reduction as it could at this time.

“The cost of funds remains high but we are doing what we can to help our members,” Mr Magin said.

“We absorbed some of the increases when rates were rising and we are continuing to absorb some of the costs of funding as official interest rates are going back down.”

“The Greater's standard variable home loan interest rate of 7.55% is highly competitive and remains below that of the major banks and its other significant competitors,” he said.

Mr Magin also encouraged people to look at all the costs of a home loan when comparing rates. He said the Greater's standard variable rate was even more competitive when you took into account other benefits offered.

“In addition to the Greater's very competitive standard variable rate you also get outstanding service, holiday rewards, no loan application fees, a fee-free savings account and no other hidden fees and charges.”

Mr Magin said while the rate cut would provide welcome relief he was encouraging people to maintain their current repayments if at all possible.

“Financial pressures may mean that some people will want to reduce their repayments but encouraging them to maintain their current repayments is one way we can help our customers to save money over the long term and pay off their loan sooner.”

The Greater Building Society is one of Australia's top 500 companies. It has 64 branches in NSW and the Queensland Gold Coast, the largest branch network of any building society in Australia.