If one were to ask a few weeks ago whether the Reserve Bank of Australia (RBA) cash rate had peaked, economists and watchful punters alike may well have answered ‘no’. 

Flash forward to today, however, and it appears more and more likely that’s the case.

The cash rate hit 4.35% in November, and the data flow now suggests the central bank will keep it there for some time to come. 

An increase in surety appears to have brought about some exciting news in the world of home loans.

Many lenders are slashing fixed interest rates, perhaps in anticipation of a future cash rate cut and perhaps also, in a bid to snatch more market share.

“Lenders eager to retain customers are looking to cut fixed rates in order to remain competitive as the signs continue to indicate good news for consumers and the market in general,” Two Red Shoes mortgage broker Brett Sutton said. 

“However an element of caution is needed as the RBA attempts to strike a balance between managing inflation, and ensuring rate rises don’t cause unnecessary pain to Australian mortgage holders.” 

The expert also notes that it’s unlikely interest rates will return to their 2020 lows (the cash rate hit a record low of 0.1% in November 2020), but borrowers may now be able to see light between the trees. 

So, with that in mind, let’s take a look at the newly lowered fixed rates on offer from some of Australia’s most recognisable lenders. 

Macquarie Bank slashes fixed rates by up to 56 basis points

One of Australia’s biggest banks made one of this week’s largest home loan interest rate moves, with Macquarie cutting its fixed rate offering to as low as 5.99% p.a. 

That rate is available for owner occupiers with loan-to-value ratios (LVRs) of 70% or less locking in their rate for three years (6.19% p.a. comparison rate*).

For owner occupiers with an LVR of 80% looking for a basis home loan and principal and interest (P&I) repayments, the bank now offers these fixed rates: 

  • One year fixed: 26 basis point decrease to 6.49% p.a. (6.34% p.a. comparison rate*)
  • Two year fixed: 50 basis point decrease to 6.15% p.a. (6.30% p.a. comparison rate*)
  • Three year fixed: 56 basis point decrease to 6.09% p.a. (6.27% p.a. comparison rate*)
  • Four year fixed: 44 basis point decrease to 6.25% p.a. (6.31% p.a. comparison rate*)
  • Five year fixed: 50 basis point decrease to 6.25% p.a. (6.30% p.a. comparison rate*)

AMP joins in on slashing action

Next up is another of the nation’s most recognisable banks, AMP Bank

The approximately 175-year-old institution made notable changes to the interest rates offered to new borrowers this week.

And while some were in an upwards direction, the majority were cuts.

Take a look these new fixed rates offered buy the bank’s Professional Package home loan product to owner occupiers with LVRs of up to 80% making P&I repayments:

  • One year fixed: 20 basis point decrease to 6.39% p.a. (7.24% p.a. comparison rate*)
  • Two year fixed: 20 basis point decrease to 6.39% p.a. (7.16% p.a. comparison rate*)
  • Three year fixed: 20 basis point decrease to 6.39% p.a. (7.08% p.a. comparison rate*)
  • Five year fixed: 15 basis point decrease to 6.69% p.a. (7.08% p.a. comparison rate*)

And for investors under the same conditions: 

  • One year fixed: 10 basis point decrease to 6.49% p.a. (7.25% p.a. comparison rate*)
  • Two year fixed: 10 basis point decrease to 6.49% p.a. (7.18% p.a. comparison rate*)
  • Three year fixed: 10 basis point decrease to 6.49% p.a. (7.11% p.a. comparison rate*)
  • Five year fixed: 15 basis point decrease to 6.79% p.a. (7.13% p.a. comparison rate*)

BOQ cuts fixed rates by as much as 76 basis points 

Finally, Queensland giant BOQ dropped its advertised fixed rates by more than three quarters of a percentage point.

The largest cut from the bank was offered to borrowers paying interest only (IO) on an investment home loan, with its four year fixed rate dropping to 6.49% p.a. (6.63% p.a. comparison rate*).

But if that’s not your cup of tea, it also cut many of its special offer rates for new borrowers with LVRs of up to 80%.

Changes for investors include: 

  • Two year fixed, discount rate: 55 basis point decrease to 6.14% p.a. (6.62% p.a. comparison rate*)
  • Three year fixed, discount rate: 35 basis point decrease to 6.14% p.a. (6.58% p.a. comparison rate*)
  • Four year fixed, discount rate: 40 basis point decrease to 6.34% p.a. (6.62% p.a. comparison rate*)
  • Five year fixed, discount rate: 30 basis point decrease to 6.44% p.a. (6.65% p.a. comparison rate*)

While owner occupiers could realise these newly dropped fixed rates: 

  • Two year fixed, discount rate: 50 basis point decrease to 6.09% p.a. (6.45% p.a. comparison rate*)
  • Three year fixed, discount rate: 36 basis point decrease to 5.98% p.a. (6.40% p.a. comparison rate*)
  • Four year fixed, discount rate: 40 basis point decrease to 6.19% p.a. (6.44% p.a. comparison rate*)
  • Five year fixed, discount rate: 30 basis point decrease to 6.29% p.a. (6.47% p.a. comparison rate*)

Other home loan interest rate movers

The big banks weren’t the only ones making notable changes to fixed interest rates this week.

BOQ subsidiary ME Bank, for instance, cut fixed rates by as much as 40 basis points, while Great Southern Bank cut its own fixed-rate products by up to 25 basis points.

Meanwhile, the fixed rates offered by BCU Bank were varied by as much as 50 basis points.

When it came to variable rates, this week’s changes include:

  • Suncorp Bank varied its variable interest rates by up to 5 basis points
  • Reduce Home Loans increased its variable interest rates by 40 basis points
  • Credit Union SA increased variable interest rates by 25 basis points

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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *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. Rates correct as of March 4, 2024. View disclaimer.

    Image by Kara Eads on Unsplash.





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