Author: Don Magin

Banks cut home loan rates by less than Greater. Don't get mad, switch.

Our CEO Don Magin says the Greater Building Society's extra cut to home loan rates is about keeping competition up to the major banks to benefit consumers. He says the big banks could have put people before profits and cut more too. But don't get mad, switch. 

Would you like to save up to $58,000 off your home loan? Read on.

Last week the Greater Building Society was one of only two major lenders to pass on more than the Reserve Bank's 0.25% cut to official interest rates (the cash rate).

The Greater cut its already low home loan rates by 0.30% while ANZ cut loans by 0.27%. Most other lenders only cut rates by 0.25%. Unlike the major banks, The Greater's standard variable home loan rate is now well under 6% . That is great news for our home loan customers. (Today we have announced that we will cut our credit card rates by 1% from June 1.)

We were able to pass on more of a rate cut to customers this time around because we have seen an easing in the cost of our funding. But the big banks have seen an easing in their cost of funding too and they have been announcing very healthy profits. Despite having higher funding costs and lower profits than the major banks we cut our rates – which were already lower than the major banks - by more. If we can pass on 30 point cut then ANZ and the other major banks could have too.

Why didn't they do as we did? We are a customer owned (mutual) financial institution. Unlike the major banks we don't have to satisfy shareholders. We have only one “master” – our customers.  That means we can offer lower rates because we don’t have to worry about also providing a return to shareholders.

My point is, don't get mad and complain about them. Do something that will help you. Switch your loan! There is competition to the major banks from challengers such as The Greater and you are throwing your hard earned money away by not switching.

Someone taking out a 25 year, $300,000 standard variable home loan with The Greater will pay $58,200 less in interest and be able to pay their loan off 7.5 years sooner than someone with a standard variable rate home loan with Westpac. That is a considerable amount of money.

The Greater will continue to push the major banks to be even more competitive to benefit consumers. We’ll always do what we can for our customers. It is clear that the major banks could still be doing more for their customers. The best way to express your dissatisfaction is to switch to The Greater.

To see how easy it is to switch your home loan call 131386 or visit one of our branches in NSW or on the Gold Coast.