Macquarie introduces 'lowest ever' fixed home loan rates

author-avatar By on May 29, 2020
Macquarie introduces 'lowest ever' fixed home loan rates

Photo by Artsy Vibes on Unsplash

After cutting home loan rates two weeks ago, yesterday Macquarie cut again, primarily to its fixed investment home loans with 70% loan-to-value ratios.

In total, from Savings.com.au's research, Macquarie made cuts to nearly 50 individual home loan products, from 10 basis points to 35 basis points. 

This follows on from a variety of home loan rate cuts the bank made two weeks ago, with a large proportion of both rate cuts  applying to loans with low LVRs (loan-to-value ratios), around 60-70%.

The lowest advertised interest rate is now 2.19% p.a, which applies to owner-occupied loans fixed for one and two years, paying principal and interest (P&I) - more details are below.

Borrowers must have a minimum deposit of 30% to access these rates i.e. 70% LVR. 

The cut to low LVR products "continues to reflect our prudent approach and ongoing focus on lower LVR lending", Macquarie's head of personal banking Ben Perham told Savings.com.au.

"We know homebuyers are looking for more certainty when it comes to their home loan," he said.

"Now, more than ever, they want to make sure their money is working hard for them and they’re looking for that extra peace of mind.

"That’s why we’re pleased to be offering our lowest fixed rates ever."

A note to Macquarie's broker network, as seen by Savings.com.au, also indicated the rate cuts were in-part prompted by broker feedback.

Home loans of note to get a haircut this week include:

  • Basic Fixed Investment P&I 70% 1 Year: 35 basis point cut to 2.59% p.a. (2.95% p.a. comparison rate*)
  • Basic Fixed Investment P&I 70% 2 Years: 35 basis point cut to 2.59% p.a. (2.92% p.a. comparison rate*)
  • Basic Fixed Investment P&I 70% 3 Years: 35 basis point cut to 2.59% p.a. (2.89% p.a. comparison rate*)
  • Basic Fixed Owner Occupied P&I 70% 1 Year: 20 basis point cut to 2.19% p.a. (2.69% p.a. comparison rate*)
  • Basic Fixed Owner Occupied P&I 70% 2 Years: 20 basis point cut to 2.19% p.a. (2.65% p.a. comparison rate*)
  • Basic Fixed Owner Occupied P&I 70% 3 Years: 20 basis point cut to 2.19% p.a. (2.60% p.a. comparison rate*)

A number of owner occupied loans with offset accounts also saw interest rate cuts by up to 35 basis points.

As you can see below, fixed home loans are now comparable to variable home loan interest rates.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
 
Budget Home Loan OO P&I
2.68% 2.74% $1,618 Go to site
2.89% 2.89% $1,663 More details
2.39% 2.40% $1,558 More details

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. 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 14 July 2020. View disclaimer.

Freedom Lend, IMB also cut high LVR loans

Freedom Lend and IMB also made cuts by some margin, however, these lenders primarily focused on products requiring smaller deposits, some as low as 5%. Some featured cuts are below.

Freedom Lend rate cuts

  • Freedom Fixed P&I 2 Years 95%: 15 basis point cut to 2.19% p.a. (2.95% p.a. comparison rate*)
  • Freedom Fixed P&I 3 Years 80%: 10 basis point cut to 2.24% p.a. (2.66% p.a. comparison rate*)
  • Freedom Fixed P&I 3 Years 95%: 10 basis point cut to 2.24% p.a. (2.90% p.a. comparison rate*)

A number of home loans fixed for one, four and five years also saw cuts by up to 28 basis points.

IMB rate cuts

IMB made two key rate cuts yesterday, both by 10 basis points, and both down to an advertised rate of 2.99% p.a:

  • Residential Fixed P&I 4 Years 90%: 3.21% p.a. comparison rate*
  • Residential Fixed P&I 5 Years 90%: 3.20% p.a. comparison rate*

These rate changes follow on from rate changes last week, where NAB slashed some of its loans by up to 60 basis points while ANZ raised some of its own.


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 November 2019. 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.

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

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.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
Harrison joined Savings in 2020. He is a journalist with more than four years of experience, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.

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