AMP 'to reduce interest rates'

AMP is set to reduce its interest rates to 6.24 per cent for new customers – a drop of ten percentage points.

AMP is set to drop its interest rates by ten percentage points for new customers to 6.24 per cent.

And the lender is hopeful that it will be able to cut its rates further, according to the Daily Telegraph, which could be good news for people using credit cards to pay off their mortgages.

Malcolm Farr, writing for the newspaper, calls the reduction a little one but said it is good to show that smaller banks are still about despite the global economic crisis.

However, Mr Farr notes that the figure remains higher than "most" bank interest charges.

Craig Dunn, managing director for the mortgage lender, praised the support from the Federal Government and the cash it has guaranteed to provide, to keep the second-tier market afloat.

This news comes after Nick Gardner, for News Limited Newspapers, said earlier this month that Australians were unsure whether to fix or stay variable on their mortgages due to maintained interest rates.

By Bret Clement