On the hunt for a new home loan or thinking of giving your existing one a makeover? You're in for a treat!
The mortgage market is buzzing with activity right now, making it an opportune time to sharpen your focus on the latest trends.
After all, what borrower doesn’t want the most competitive deal they can get?
This year looks like it could bring a roller-coaster of rate drops.
It makes sense that banks and lenders might continue to drop rates, especially fixed rates, as expectations of a Reserve Bank of Australia (RBA) cash rate cut accelerate.
Economists at all of the big four banks forecast the first cash rate cut to come in the second half of this year.
Until that hits the market, variable rates will likely keep holding their breath, staying relatively high.
But fixed rates? They're already taking the plunge. At least, that’s what played out this week.
If you're stepping into the market for a new home loan, or just curious about the evolving landscape, these are the changes that should be on your radar.
loans.com.au slashes fixed rates by up to 50 basis points
loans.com.au led the way on rate movements this week, dumping some of its fixed rates by as much as half a percentage point.
The non-bank lender’s new special offer on a five-year fixed rate (5.94% p.a.) is one of the lowest rates on the market for that length of time, according to Savings.com.au market research.
If you’re in the market for an owner-occupier fixed rate home loan with principal and interest (P&I) repayments, you might want to cast your eyes over these changes:
|
Owner-occupier product |
Change |
New rate (p.a.) |
Comparison rate* (p.a.) |
|
One year fixed |
-30bp |
6.34% |
6.83% |
|
Two years fixed |
-45bp |
6.14% |
6.77% |
|
Three years fixed |
-45bp |
6.09% |
6.71% |
|
Four years fixed |
-50bp |
6.24% |
6.70% |
|
Five years fixed - Special offer |
-50bp |
5.94% |
6.57% |
Meanwhile, investors could take advantage of these newly-lowered rates:
|
Investor product |
Change |
New rate (p.a.) |
Comparison rate* (p.a.) |
|
One year fixed |
-30bp |
6.54% |
7.12% |
|
Two years fixed |
-45 bp |
6.34% |
7.05% |
|
Three years fixed |
-45bp |
6.29% |
6.99% |
|
Four years fixed |
-50bp |
6.44% |
6.98% |
|
Five years fixed |
-50bp |
6.49% |
6.95% |
Read more: What is a comparison rate?
Great Southern Bank lowers variable rates by as much as 30 basis points
Great Southern Bank broke stride with many of this week’s interest rate movers.
It was the only bank to cut variable rates for owner-occupiers, and not by a fizzle but by a bang.
It lowered some of the rates charged to new borrowers in need of an offset account by as much as 30 basis points, with changes including:
|
Product |
LVR |
Change |
New rate (p.a.) |
Comparison rate* (p.a.) |
|
Basic variable P&I |
80%-90% |
-5bp |
6.44% |
6.50% |
|
Offset Variable P&I |
80%-90% |
-5bp |
6.59% |
6.65% |
|
Basic Variable interest only (IO) |
70%-80% |
-20bp |
6.94% |
6.47% |
|
Offset Variable IO |
70%-80% |
-30bp |
7.24% |
6.59% |
Read more: What is LVR?
Heritage Bank & People’s Choice shake fixed and variable interest rates up
Coinciding with their first merger anniversary and ahead of their rebranding to People First Bank, Heritage Bank and People’s Choice have made concurrent adjustments to home loan interest rates.
They've both nudged up many variable rates by five basis points, while trimming fixed rates for owner-occupiers and investors alike.
Changes made to variable rate owner-occupier loans included:
|
Bank |
Product |
LVR |
Change |
New rate (p.a.) |
Comparison rate* (p.a.) |
|
People's Choice |
Basic variable, P&I - New business special |
70%-80% |
5bp |
6.09% |
6.10% |
|
Heritage Bank |
Discount variable, P&I |
70%-80% |
5bp |
6.09% |
6.11% |
Meanwhile, both banks cut their rates offered on certain products for fixed periods of three to five years.
People’s Choice slashed rates on its non-discounted Package home loan offerings for owner-occupier borrowers with LVRs of up to 80% making P&I repayments to 5.79% p.a.
Heritage Choice, on the other hand, dropped the rate on its both basic and Home Advantage package fixed rate home loans, for owner-occupiers making P&I repayments with LVRs of up to 95%, to 5.79% p.a.
Comparison rates* on the banks’ products undergoing cuts this week range from 6.38% p.a. to 7.99% p.a.
Australian Military Bank drops fixed mortgages by up to 40 basis points
Finally, customer-owned Australian Military Bank slashed many of its fixed rate products, with changes for those making P&I repayments including:
|
Product |
Change |
New rate (p.a.) |
Comparison rate* (p.a.) |
|
One year fixed |
-10bp |
6.6% |
6.98% |
|
Two years fixed |
-25bp |
6.45% |
6.91% |
|
Three years fixed |
-40bp |
6.3% |
6.82% |
|
Five years fixed |
-24bp |
6.45% |
6.78% |
|
Investor: two years fixed |
-25bp |
6.7% |
7.16% |
|
Investor: three years fixed |
-40bp |
6.55% |
7.07% |
Image by Spacejoy on Unsplash
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