March sees abundance of home loan rate changes

William Jolly By on March 20, 2019
 
March home loan changes

A large number of home loan lenders – big and small – have made changes to interest rates so far this month.

A total of 25 providers have changed interest rates in March so far, with most of these changes being decreases.

Major brands to change rates include IMB, AMP, NAB, RAMS, Bank of Sydney and Loans.com.au (just to name a few).

Savings.com.au can confirm the following lenders have made changes to their interest rates over just the past two weeks alone:

  • BOQ
  • ME Bank
  • Macquarie Bank
  • Bankwest

BOQ: 18/03/19

Bank of Queensland is the most recent major bank to change home loan interest rates.

On the 18th of March it lowered various home and investment fixed rate loans by 5 basis points – a small change compared to some of the others in this list.

In total 10 of BOQ’s home loans had their rates reduced by this amount, including its:

  • Home loan privileges product (two and three years, interest-only as well as principal and interest)
  • Fixed investment and residential products (two and three years, interest-only as well as principal and interest)

BOQ also raised some of its introductory rates for investment home loans by as much as 25 basis points.

ProductOld interest rate Change (% points)New interest rate Comparison rate
Intro Rate Variable Investment (2 yr Intro) – principal and interest 3.75%0.25 3.99% 4.56%
Intro Rate Variable 2 yr Intro – interest only3.99%0.194.18%4.30%
Intro Rate Variable Investment 2 yr Intro – interest only4.14%0.044.18%
4.59%

Source: BOQ

BOQ has changed its deposit requirements too. Now, owner-occupiers can apply for a loan with a 10% deposit (90% LVR), instead of the previously required 20%.

Macquarie Bank: 15/03/19

Macquarie Bank decreased a large number of its fixed home loan rates for both investors and owner occupiers by as much as 20 basis points last week.

The 20 basis point reductions apply to interest-only products for new borrowers on its basic and offset flyer home loans, while principal and interest borrowers can now get a loan for 11 basis points less.

This follows Macquarie hiking home loan rates for customers just last month on variable rate home loans.

Some key changes are as follows:

ProductOld interest rate Change (% points)New interest rate Comparison rate
Basic Fixed Owner Occupied 70 LVR 2 yrs – interest only4.29%-0.20 4.09%4.25%

Basic Fixed Owner Occupied 80 LVR 2 yrs – principal and interest
4.09%-0.103.99%3.91%
Offset Fixed Owner Occupied 70 LVR 3 yrs – principal and interest 3.99%-0.113.88%
4.06%
Basic Fixed Investment 70 LVR 3 yrs – interest only4.89%-0.104.79%4.86%

Basic Fixed Investment 80 LVR 3 yrs – principal and interest
4.39%-0.104.29%4.25%

Source: Macquarie

ME: 15/03/19

ME’s changes were made to its package home loans, with rate cuts as large as 80 basis points. 

This massive change was made to its Member Package Flexible Home Loan product for LVRs above 90%.

It also made a 27 basis point reduction to its investment Member Package product for LVRs between 80% and 90%.

Product Old interest rate Change New interest rate Comparison rate
Member Package Inv Flexible Home Loan 80 to 90 LVR 4.62% -0.27 4.35% 4.75%
Member Package Flexible Home Loan OO Above 90 LVR 5.26% -0.8 4.46% 4.87%

Source: ME Bank

Bankwest: 12/03/19

Bankwest decreased various home loan interest rates by as much as 55 basis points.

These were mostly to its fixed rate products with the exception of one interest-only variable product.

Otherwise, the only changes were to its ‘Complete’ home loan product across investment, owner-occupier, principal and interest and interest-only options, which like ME’s are package home loans.

Despite the reductions, the comparison rates on these products are still quite high.

Product Old interest rate Change New interest rate Comparison rate
Complete Variable Home Loan Investment 90% 200k+ – interest only 4.54% -0.1 4.44 4.84%
Complete Home Loan Fixed Rate Investment 5 yrs 200k+ – principal and interest 4.74% -0.55 4.19 4.92%
Complete Home Loan Fixed Rate Investment 2 yrs 200k+ – principal and interest 3.98% -0.04 3.94 5.00%
Complete Home Loan Fixed Rate Investment 5 yrs 200k+ – interest only 5.04% -0.16 4.88 5.17%
Complete Home Loan Fixed Rate Investment 2 yrs 200k+ – interest only 4.48% -0.3 4.18 5.03%
Complete Home Loan Fixed Rate Owner Occupied 5 yrs 200k+ – principal and interest 4.54% -0.55 3.99 4.50%

Source: Bankwest

Why all the changes?

Rates changes happen all the time, but they seem to have really ramped up lately.

Already in 2019, major lenders such as AMP, Westpac and Citi have cut interest rates on a plethora of products, many of which are fixed rate.

The providers above have also made a number of cuts to fixed rate products, and it’s likely this is being in done in anticipation of a cut to the official cash rate by the Reserve Bank.

Both NAB and Westpac have officially predicted not one but two 25-basis-point cash rate cuts before the year is out, leaving the cash rate at an unprecedented 1.00%.

Lenders tend to pass on these cuts to consumers, so the fact that so many fixed rates are being reduced for two+ year terms indicates some lenders are hoping to entice customers into locking in their interest rates before rates fall any further.

A 20 basis point reduction on a fixed interest rate is normally a pretty good deal, but not in the context of a 50 basis point cash rate cut.

In addition to anticipated cash rate cuts, there’s been an abundance of evidence showing how much the housing market has been slowing of late, like:

So many lenders dropping rates suggests they’re trying to drum up activity among borrowers and stay competitive as their rivals do the same.

Now more than ever, customers need to do their research before settling on a home loan.


For feedback or queries, email will.jolly@savings.com.au

Image by Julian Hacker from Pixabay

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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 and comparison website 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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