Australian mortgage lenders are reshaping their offers as banks make significant adjustments to fixed rates, particularly in the wake of recent decisions by the Reserve Bank of Australia (RBA). Among those leading the charge, ANZ, Macquarie, Westpac, and customer-owned banks like Newcastle Permanent and Greater Bank are offering new rates that could reshape the home-buying landscape.
This week, ANZ has slashed rates across its fixed-rate home loans, dropping them by as much as 25 basis points to an appealing 5.89% p.a. (6.66% p.a. comparison rate) for owner-occupiers with a maximum loan-to-value ratio (LVR) of 80%. Even for those with less than a 20% deposit, the rate still remains competitive at 6.34% p.a. (6.88% p.a. comparison rate) for one-year fixed terms. Meanwhile, interest rates for investment home loans fixed for one year have been set at 6.09% p.a. (7.21% p.a. comparison rate) for an 80% LVR, and 6.54% p.a. (7.44% p.a. comparison rate) for 90% LVR.
In a closely related move, Macquarie has announced reductions on fixed home loan rates for both owner-occupiers and investors, now featuring rates as low as 5.39% p.a. (5.82% p.a. comparison rate) for those accepting a two-year fixed term with a 70% LVR. For customers with offset accounts, the rates match that lowest at 5.39% p.a. (6.00% p.a. comparison rate).
Westpac has also taken a notable step, unveiling a new online-only refinance offer at 5.84% p.a. with a 5.85% p.a. comparison rate, specifically for eligible refinancers looking to streamline their home loans. Customers are required to refinance online with Westpac and maintain a loan-to-value ratio of 70% or less to access this promotion.
Customer-owned lender Newcastle Permanent is not to be overlooked, where rates have been reduced up to 20 basis points. The bank is now offering a competitive special rate of 5.59% p.a. (7.74% p.a. comparison rate) for borrowers locking in for two years. Those applying online could benefit from cashback offers up to $3,000, maintaining incentives during a period characterized by intense competition among lenders.
Greater Bank has joined the rate-cutting frenzy, also applying reductions of up to 20 basis points across its home loan products with fixed terms of one and two years. Its lowest fixed rate now stands at 5.49% p.a. (7.19% p.a. comparison rate).
Amid these changes, Beyond Bank and IMB have made similar cuts, lowering some fixed home loan rates by as much as 85 basis points and 30 basis points, respectively. Easy Street Financial Services has also trimmed its fixed rates by 15 basis points, illustrating a sweeping trend among lenders responding to market pressures.
Queensland Country Bank has revealed a special variable rate of 5.74% p.a. aimed at owner-occupiers, which is intriguing considering it applies up to a maximum LVR of 95% (6.10% p.a. comparison rate). This product not only presents an attractive rate for homeowners but also includes appealing features such as an offset account.
As enthusiasm for reduced rates grows, financial analysts are gripping the situation closely, particularly with the RBA's next monetary policy meeting scheduled for March 31 and April 1. Market stakeholders anticipate possible discussions about further cuts to cash rates, though current data suggests a bit of restraint might be in order. As one economist put it, "We might be in the eye of the storm. But lenders appear to be bracing for wind once more," indicating a cautious approach as inflation and job market conditions shift.
As it stands, most lenders show fixed and variable rates sitting between 5% and 6% p.a. However, certain products still hover above 7% p.a. The biggest question remains whether the RBA will catalyze further adjustments closely following its next meeting, and what that will mean for both mortgage holders and potential buyers alike in terms of favorable borrowing conditions.
This week’s adjustments by leading banks showcase how competition remains fierce in the mortgage space while revealing just how vital the community's conditions are in swaying lender assessments.
