Looks like those who took up the loans.com.au offer back in June 2011 which guarantees rate movement to be in line with RBA's cash rate (for the first 5 years) will be laughing now. Compared to NAB for example, loans.com.au rate (as per that offer) would have given the borrower an additional 14 basis point saving, since June 2011.
cough ................
Its called cannibalising your own business.
Funny how FM needs to raise its rates ...........
Its probably good for FM that LOANS is only a small volume operation.........otherwise something would have to give somewhere.
1. Either we break our RBA link promise.......... I suspect its not contracted ??? rather an undertaking ( someone with a LOANS contract can tell me)
2. We take less and less margin, because as we can see from their press below........their funding is subject to the same pressures as banks
( really ??)
3. Do over your existing and new brand name borrowers for your online cannibal brother.
Interesting times ahead .
thanks
rolf
Important changes from FirstMac
Adjustment to variable interest rates
As a financial institution we understand the importance of maintaining interest rates for our borrowers, while balancing this with the changing global markets and costs of funding.
As a result, and in line with recent market shifts, FirstMac will adjust its variable interest rates as follows:
New Business
Effective 27 February 2012, variable interest rates for new business will increase by 0.13% pa.
Existing business
Effective 27 February 2012, variable interest rates for existing business will increase by 0.10% pa.
Existing portfolio repayment changes will be effective from 27 March 2012, and borrowers will be advised accordingly.
Updated product materials reflecting these changes will be accessible from the Brokers Online website.