Adelaide tacks to the downside on home loan rates

Bendigo's Adelaide Bank is adding spark in the mortgage market, with cuts of around 20 basis points freshening up the bank's pricing on two product types.

Adelaide announced a reduction on its SmartSaver basic variable product by 15 basis points to 4.84 per cent, while its "fully featured 100 per cent offset SmartFit variable product" is to fall 20 bps to 4.89 per cent, "until further notice."

Coincidentally, the low rate standard-setter, loans.com.au, which offers a benchmark 4.54 per cent interest rate and 90 per cent LVR mortgages, has bundled these with what it describes as "free products and services that really help customers get off to the best start in their new home and on a path to building wealth."

The loans.com.au value pack has a 4.54 percent interest rate, 4.56 percent comparison rate.

"To the best of our knowledge, we have had the lowest variable rate in Australia for more than a year, and the lowest comparison rate for around two years," said a statement from FirstMac, the controller of loans.com.au, yesterday.

Adelaide's head of broker distribution, Fons Caminiti, said yesterday: "There is some pressure in the sense that other lenders are being so aggressive with pricing.

"You look at your value proposition looking for some levers you can pull to make the numbers viable.

"This will get us attention in the market," he said.

"This meets margin requirements. We are not in business of going out and to buy business. This is viable for a period of time."

Caminiti said demand was "pretty lively, the market still bowling along. This offer gives us an opportunity to keep our momentum going."

"There is good business to be done at any rate," he said, pointing to the absence of a cap on loan sizes and a market-matching 90 per cent LVR limit.

The seven brokers that dominate business flow are the target for this offer, along with a short list of niche names in the mortgage market.