The dust is now starting to settle in the aftermath of the May monetary policy decision, just in time for speculation to start ramping up about what will happen when the RBA reconvenes in July.
There's less than four weeks to go until the July meeting, and another 0.25% cut appears to be the likeliest outcome based on market expectations. However, the outlook doesn't look as 'signed, sealed, delivered' as much as May's.
It's not publicised exactly what the RBA consider to be a 'neutral cash rate' - by basically every estimate we're not there yet - but with rates well and truly on the way down the economy is rapidly shifting towards favouring the debt-laden again.
This week bought a few additional rate cuts on top of the lenders passing on the May cut, as competition in the market starts to heat up.
Even in the three weeks until the July decision, it won't be surprising to see a flurry of fixed cuts and even some out of cycle variable rate reductions as lenders try to undercut one another.
For now, here were the major changes in the week ending 13 June:
This week's RBA cuts
Most of the major banks passed the cash rate cut on to variable rate home loan customers within a fortnight of the RBA decision.
By now its probably fair to refer to rate cutters of the week past as stragglers - here are the latest lenders to pass on the cut, as well as the new lowest variable rate at each.
| Lender | New lowest advertised variable rate |
|---|---|
| Bank of Us | 5.69% p.a. (5.71% p.a. comparison rate*) |
| BCU Bank | 5.49% p.a. (5.52% p.a. comparison rate*) |
| Community First | 5.49% p.a. (5.54% p.a. comparison rate*) |
| P&N Bank | 5.63% p.a. (5.66% p.a. comparison rate*) |
While virtually every lender has at least announced the cut will be passed on, that still isn't everyone when it comes to actually implementing the changes.
Customers of Homestar Finance for example will be waiting until 16 June to see the changes made official, while at Police Credit Union the new rates won't take effect until 1 July.
And depending on when customers' home loan repayments are due, they could be waiting until July to see a reduced minimum repayment amount.
Read more: Home loan rate changes after RBA cut
Unloan cuts variable rates for investors again
Digital lender Unloan, built and funded by CommBank, was the opposite of a straggler, announcing and implementing 0.25% cash rate cuts on the same day as the RBA.
This week, Unloan surprised the market with a follow up cut - having already reduced variable rates for investors by the full 25 bps, those with an LVR below 80% can now benefit from an additional 0.10% reduction.
The new rate is 5.69% p.a. (5.60% p.a. comparison rate*), among the lowest variable investment rate in our database.
CommBank also cut variable investment rates again
Not to be outdone, CBA itself also cut variable rates, for new investors, by up to 0.12% on Friday.
Its the Digi Home Loan, available online only, that is seeing rates cut again, for both P&I and interest only repayments.
The lowest rate matches Unloan, although the subsidiary offers 5.69% p.a. on loans all the way up to 80% LVR, not to mention its annual discount.
Here are the new Digi Investment rates (variable) at CommBank:
| Product | P&I | Interest Only |
|---|---|---|
| LVR up to 60% | Down 0.09% to 5.69% p.a. (5.82% p.a. comparison rate*) | Down 0.09% to 5.95% p.a. (5.92% p.a. comparison rate*) |
| LVR between 60 and 70% | Down 0.07% to 5.74% p.a. (5.87% p.a. comparison rate*) | Down 0.07% to 6.00% p.a. (5.97% p.a. comparison rate*) |
| LVR between 70 and 80% | Down 0.12% to 5.79% p.a. (5.92% p.a. comparison rate*) | Down 0.12% to 6.05% p.a. (6.02% p.a. comparison rate*) |
Other moves
- Bank of Us and Community First Bank also cut fixed rates, Bank of Us by up to 0.50% and Community First up to 0.25%.
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.54% p.a. | 5.58% p.a. | $2,852 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.49% p.a. | 5.40% p.a. | $2,836 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.64% p.a. | 5.89% p.a. | $2,883 | Principal & Interest | Variable | $250 | $250 | 60% |
| Promoted | Disclosure | ||||||||||
5.64% p.a. | 5.89% p.a. | $2,883 | Principal & Interest | Variable | $248 | $350 | 60% |
| Disclosure |
Picture from Lisa Anna on Unsplash
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