ANZ, CBA, NAB and more cut fixed rates post-cash rate change

William Jolly By on October 8, 2019
 
October 8 fixed rate changes

Photo by Daniel Watson on Unsplash

While much of the focus has been on variable rates, there’s been plenty of cuts to fixed rates following the latest cash rate cut.

Since the 25 basis point cut, around 40 different lenders have announced reductions to variable interest rates, with most choosing to not pass on the full rate cut.

But fixed interest rates have also been cut, both quietly and not-so-quietly.

More than a dozen lenders have cut fixed rate home loans since October 1, perhaps a sign they’re expecting the next rate cut to happen very soon.

Three of the big four banks – ANZ, Commonwealth Bank and NAB – have slashed fixed interest rates over the past week.

The following is a summary of these changes, featuring some of the lowest new fixed rates offered by each:

  • NAB has cut various fixed rates by up to 40 basis points: two-year fixed package loan for owner-occupiers now offering an interest rate of 2.98% p.a. (4.47% p.a. comparison rate*)
  • ANZ has cut investment fixed and residential fixed interest rates by up to 55 basis points: two-year Breakfree residential loan now offering an interest rate of 2.98% p.a. (4.57% p.a. comparison rate*)
  • CBA has cut fixed interest rates on its residential wealth package product by up to 29 basis points: two-year owner-occupied wealth package now offering an interest rate of 2.99% p.a. (4.58% p.a. comparison rate*)

The other big bank, Westpac, may not have cut fixed rates this month because it already decimated fixed rates by up to 130 basis points last month, alongside its subsidiary companies St. George, BankSA and Bank of Melbourne.

Another big lender to cut fixed rates in October is ING, who cut fixed mortgage rates by as much as 75 basis points just a couple of hours before the RBA’s official announcement.

ING’s owner-occupier fixed interest rates were cut by up to 65 basis points, while the 75 basis point cut applied to principal and interest (P&I) investment home loans:

  • One-year Investment Fixed for borrowers making P&I repayments cut by 75 basis points to 3.54% p.a. (5.04% p.a. comparison rate*)
  • Two-year Investment Fixed for borrowers making P&I repayments cut by 70 basis points to 3.49% p.a. (4.88% p.a. comparison rate*)
  • Three-year Investment Fixed for borrowers making P&I repayments cut by 60 basis points to 3.49% p.a. (4.75% p.a. comparison rate*)
  • Four-year Investment Fixed for borrowers making P&I repayments cut by 75 basis points to 3.84% p.a. (4.74% p.a. comparison rate*)
  • Five-year Investment Fixed for borrowers making P&I repayments cut by 75 basis points to 3.84% p.a. (4.64% p.a. comparison rate*)

The table below shows a collection of some of the lowest fixed interest rates on the market. 

Provider Ad rate p.a. Comp rate* p.a. Monthly repayments  
Great Rate Discount Fixed 1yr 2.79% 3.94% $1,641 More details
Fixed OO P&I 3yrs 2.98% 4.39% $1,682 More details
Fixed Rate 2yrs OO P&I 2.98% 4.50% $1,682 More details
Residential Fixed P&I 2yrs 90% 2.99% 3.55% $1,684 More details
Breakfree Residential Fixed 2yrs 3.18% 4.59% $1,725 More details
Ad rate p.a. Comp rate* p.a. Repayments
Great Rate Discount Fixed 1yr
2.79% 3.94% $1,641
More details
Fixed OO P&I 3yrs
2.98% 4.39% $1,682
More details
Fixed Rate 2yrs OO P&I
2.98% 4.50% $1,682
More details
Residential Fixed P&I 2yrs 90%
2.99% 3.55% $1,684
More details
Breakfree Residential Fixed 2yrs
3.18% 4.59% $1,725
More details

Base criteria of: a $400,000 loan amount, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 2 October 2019. View disclaimer.

Who else has cut fixed rates?

Here is a selection of some of the biggest changes to fixed home loan interest rates so far in October (excluding the major banks already mentioned) plus some of the lowest new fixed rates offered by each:

  • TicToc cut by 15 basis points on select fixed rates: Fixed one-year owner-occupied Live In home loan 2.84% p.a. (2.94% p.a. comparison rate*)
  • Newcastle Permanent cut fixed rates by 25 basis points: three-year fixed owner-occupied loan 3.09% p.a. (4.26% p.a. comparison rate*)
  • Macquarie Bank cut a suite of fixed-rate products by up to 30 basis points: basic owner-occupier three-year fixed loan 2.99% p.a. (3.17% p.a. comparison rate*).
  • Beyond Bank cut fixed owner-occupied loans by 20 basis points: three-year year fixed rate home loan Special 2.99% p.a. (4.38% p.a. comparison rate*)
  • QBank cut investment and owner-occupied fixed rates by up to 26 basis points: three-year fixed special offer 2.94% p.a. (3.88% p.a. comparison rate*)
  • Bank Australia cut its basic three-year fixed home loan by 10 basis points: basic fixed two-year home loan 3.04% p.a. (3.50% p.a. comparison rate*)
  • Homestar Finance cut many investment and owner-occupied fixed loans by 25 basis points: two-year fixed owner-occupied 3.14% p.a. (2.84% p.a. comparison rate*)

With only one week of October down, we could well see many more lenders reduce their fixed interest rates alongside their variable products as they prepare for at what’s looking like at least one other reduction in the cash rate in the next few months.

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Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in 2018. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure. The interest rate per annum is based on a loan credit of $150,000 and a loan term of 25 years.

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William Jolly
William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.
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