Michelle Simpson, on her block of land in Joy St, Goonellabah, spent weeks looking for the best home loan deal.
Michelle Simpson, on her block of land in Joy St, Goonellabah, spent weeks looking for the best home loan deal. Doug Eaton

Banks show little interest

IT SEEMS North Coast homebuyers may be resigned to the Scrooge-like behaviour of the big four banks.

Despite record profits the Commonwealth, NAB and Westpac banks have passed on just 40, 32 and 37 points respectively of last week's official RBA cut of 50 basis points.

If the full interest rate cut had been passed on it would have saved a borrower with a $300,000 mortgage about $96 a month.

According to one North Coast mortgage broker, if borrowers continue to be complacent about mortgage interest rates the big banks will continue to not pass on interest rate cuts in full.

"All borrowers should be willing to change to find a better deal," said Marilyn Cole, personal mortgage adviser with Smartline.

However first-time buyer Michelle Simpson seems fairly happy with her first mortgage.

With her partner currently overseas Ms Simpson had to find finance and manage the purchase of their land in the Olleyville Estate in Goonellabah on her own.

She dealt with a bank and a mortgage broker, eventually opting to deal direct with the bank for finance.

Her lender is yet to make a decision on whether or not to pass on last week's interest rate cut.

They will now be watching the Reserve Bank's interest rate decisions more closely.

"With the amount of profit the big banks seem to be making it would be reasonable for them to pass on the rate cut to stay competitive," she said.

Ms Simpson believes it paid off for her to shop around for the best deal and not just opt for the lowest mortgage rate.

"Even though the interest rate is low there may be hidden costs and annual fees," she said.

"Don't be afraid to ask questions; it really pays off."

Meanwhile Ms Coles was surprised the big banks' failure to pass on rate cuts in full appeared not to be costing them customers.

"One of my clients was still paying 7.2% when we can find rates of 5.89%," she said.

But she is seeing an emerging trend among borrowers to lock in with fixed interest rates.

Joe and Hayley Beohm have just bought an investment property in the Regatta Estate at Goonellabah.

Mr Beohm, a carpenter, is planning to build a duplex or three town houses on the property as an investment

They opted to sidestep the vagaries of the interest-rate game and fix their interest rate for three years.

"If interest rates go lower, so be it; it was a gamble," he said.

"We like the certainty of knowing what the payments are going to be."

Mr Beohm is always looking at property guides and is always keeping an eye on the market.

"Being a self-employed tradesman, this is going to be my super."

An interest-rate decision from ANZ bank is expected next Friday.

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