South Australian lender HomeStart Finance will pass on the RBA’s interest rate cut to customers. The RBA has decided to reduce the official interest rate by 0.25% after 12 consecutive rises, the first reduction in almost seven years.

With high interest rates affecting home sales and preventing many first home buyers from entering the market, as well as placing increased stress on home owners, HomeStart has welcomed the RBA’s move to reduce the pressure of continual increases.

HomeStart CEO Gary Storkey said that the interest rate cut is good news for Australian families struggling to overcome the challenge of housing affordability, as well as those facing mortgage stress - but only if mortgage providers pass the saving on to their customers.

“We have cut our variable interest rate by the full 0.25% so that customers will gain the greatest benefit,” Mr Storkey said.

“The RBA’s decision represents an opportunity for lenders to provide some relief to customers struggling to meet rising costs of petrol, groceries and other necessities, and we’re pleased to be in a position where we can do that,” he said.

While continuing fallout from the global credit crunch has had an impact on Australian lenders, including HomeStart, the state government backed lender believes that there is still scope for passing the interest rate cuts directly to customers.

“At HomeStart, we’ve seen the effects of high interest rates on affordability, which is why we developed products like the Breakthrough Loan, which offers increased borrowing capacity or decreased repayment amounts through a shared appreciation arrangement,” Mr Storkey said.

“We’re also looking for other ways to help people manage their mortgages with less stress, like cutting fixed interest rates to offer longer term security,” he said.