Greater Building Society cuts standard variable rates by 20 basis points to 6.05%

By Larry Schlesinger
Friday, 07 December 2012

The Greater Building Society has cut its standard variable home loan and basic variable home loan rates by 20 basis points to 6.05% p.a (comparison rate of 6.11%) and 5.69% (comparison rate of 5.75%) respectively.

The Newcastle-based mutual lender has passed on the full rate cut to package home loan borrowers with their rate falling to 5.49% (comparison rate 5.85%).

The reduced variable rates take effect from December 15.

The Greater’s standard variable rate is 0.37 percentage points below the average of the rates of the major four banks (assuming ANZ also reduces its rates by 0.20 per cent next Friday).

“Under the new rates, a person taking out a 30 year $300,000 Greater Building Society standard variable home loan would be $82,000 better off than someone taking out the same loan with Westpac,” says Greater CEO Don Magin

“For little effort you can save thousands of dollars off your loan, that is a pretty hefty pay packet,” he says.

“People are throwing their hard earned money away by not switching and switching is easier than most people think.”

Customers on a 30 year standard variable or basic home loan of $300,000 will see their monthly repayments reduce by $39.

The building society is encouraging borrowers to maintain their current payments and use the rate cut to get ahead on their home loan and pay it off sooner.

The Greater recently surveyed 100 of its customers and 98% indicated they were maintaining their repayments when rates were cut.

A Greater borrower who hasn’t changed their payments since rates fell in May has saved themselves approximately $140,000 in interest over the life of their loan and will repay it six years earlier.

Property Observer readers can get great refinancing tips from two free webinars we have run this year: How smart property buyers and investors should approach refinancing in the current environment and,The Do's and Don’ts of Refinancing Your Existing Home Loan ... and How to Avoid Unnecessary Hurdles.