Customer-owned banks cut big despite RBA hold

author-avatar By on October 09, 2020
Customer-owned banks cut big despite RBA hold

Photo by Joshua Willson on Unsplash

Both Gateway Bank and CUA cut home loan interest rates yesterday, with one loan suite cut by 129 basis points.

For Gateway Bank, its residential fixed loans for two and three years were cut by 129 basis points, while some investment loans also got a sizeable haircut. Some further details are:

  • Residential Fixed 3 Years: 129 basis point cut to 2.59% p.a. (4.05% p.a. comparison rate*)
  • Investment Fixed 3 Years: 115 basis point cut to 2.99% p.a. (4.66% p.a. comparison rate*)

A range of packaged home loans were also cut, and Gateway Bank also cut a raft of variable loans just three weeks ago.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

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. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.

Meanwhile, CUA also made some changes but for variable home loans, in both the owner-occupier and investment spaces. Some key details are:

  • Achieve Variable OO P&I 250k+: 25 basis point cut to 2.55% p.a. (2.60% p.a. comparison rate*)
  • Achieve Variable Inv P&I 250k+: 25 basis point cut to 2.86% p.a. (2.91% p.a. comparison rate*)

The 'Achieve' line is a series of basic home loans with a limited offset account attached.

Both of these customer-owned institutions cut rates despite no changes to the Reserve Bank cash rate earlier in the week.

Elsewhere, it was a very subdued week for rate changes, with Macquarie the only other lender of note to make some cuts, albeit only by 10 basis points this morning.

In total, Macquarie applied the cuts to in excess of 40 individual home loans, with some of the highlights including:

  • Basic Variable OO P&I 60% LVR: Down to 2.49% p.a. (2.49% p.a. comparison rate*)
  • Basic Variable OO P&I 70% LVR: Down to 2.54% p.a. (2.54% p.a. comparison rate*)
  • Basic Variable Inv P&I 60% LVR: Down to 2.69% p.a. (2.69% p.a. comparison rate*)

In a note to brokers, Macquarie said it hopes these new rates and "industry-leading" processing times lead to "more opportunities and conversations with your clients". 


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 2020) 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, Performance Drive 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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