In a note this week, CBA economist Stephen Wu said almost no new lending in December was at fixed rates. While more than 40 per cent of new loans were at fixed rates during the first two years of the pandemic, he said since the Reserve Bank began their hiking cycle in May 2022, only 7.5 per cent of new loans were written at a fixed rate.

RateCity director of research Sally Tindall said there was “no question the tide has turned” with fixed rates.

“In the last couple of weeks, we’ve seen more cuts to fixed rates,” she said, noting a number of factors driving the fall, including demand from borrowers. “The appetite for fixing among borrowers could not be lower,” she said. “It’s the lowest proportion in a while.”

Tindall also said it was largely a function of people predicting rate cuts as early as this year.

“Cash rate cuts are almost a certainty,” she said. “And fixing your home loan rates and getting it wrong is often worse than choosing a variable rate and getting it wrong,” she said.

Tindall and Marshall said the rates set by lenders were also a function of competition and how much they wanted to grow their loan books.

Loading

“Those wanting more customers will be more aggressive,” Marshall said.

Tindall said the latest Australian Prudential Regulation Authority (APRA) data released this week showed ANZ was still leading the way in home loan growth, while Macquarie was also charging ahead.

“CBA is growing their loan book, but they’re still losing market share,” she said.

Tindall said RateCity’s database showed that in the last month, only eight lenders had hiked at least one advertised fixed rate, while 15 had cut at least one fixed rate, but noted fixed rates still had a way to fall.

“The lowest fixed rate on our database right now is 5.48 per cent for a 3-year term, while the lowest variable is just 0.27 percentage points higher at 5.75 per cent. Two standard RBA hikes would change this equation in an instant, provided the lender passed on any RBA cuts in full, although that’s never a given,” she said.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.