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Finance company GE Money has lowered its home loan rates after complaints that it was still charging top dollar despite the tumbling official cash rate.
The Herald reported last week that GE was still charging mortgage interest rates of up to 10.25 per cent.
The Reserve Bank has cut the cash rate by 3.25 percentage points since July 24, and most lenders have significantly dropped their rates.
The main banks' floating mortgage rates range from 7.45 per cent to 8.2 per cent.
GE Money said yesterday its variable rates would drop 1.15 percentage points to around around 9.1 per cent.
Existing customers would get the lower rates from December 30, and new Wizard Home Loans customers could get it from today.
GE announced in October that the credit crunch was forcing it to pull back from the home loan and car finance markets in Australia and New Zealand.
It still offered mortgages through its subsidiary Wizard, but is not doing any more home lending through third parties.
It said that because it relied solely on wholesale funds, it has taken a while for it to assess its actual cost of funds, which was only partly influenced by the Reserve Bank rate.
The Herald's story prompted a series of responses from GE customers.
One complaint was that the company was no longer offering any fixed rates other than a one-year term, meaning that customers coming off fixed mortgages had few choices.
A GE spokesman confirmed that its only fixed mortgage was the one-year term.
Another complaint was that the company was not allowing any variations to its home loans, such as top-ups. GE said that because its third party loan book was being wound down, those customers could not make changes, but Wizard customers could.
Another said he was still being charged 11.6 per cent on his GE home loan. The GE spokesman said different borrowers were on different rates, depending on their "capacity and ability to repay".
