Add CategoryIn case you missed it, the world's largest economy slashed interest rates this week, as did some notable Aussie lenders.
Joining the Federal Reserve in taking cutting action were majors AMP Bank and Bendigo Bank – with the latter posting a fresh fixed rate of 5.54% p.a.
That's lower than the 5.59% p.a. three-to-five year fixed rate posted by HSBC last month, but still a way off the market's lowest – 4.99% p.a. on SWS Bank's special offer three-year fixed rate.
Australia woke on Thursday to learn that the U.S. central bank slashed its benchmark rate by 50 basis points, bringing its target range to 4.75%-5.00%.
That figure is still notably higher than the RBA's (apparent) peak cash rate of 4.35%.
So, when might it be Australia's turn for a cash rate cut? That's still anyone's guess.
CommBank updated its forecast on Thursday and now believes the first cut will come in December – one month later than its previous prediction and months ahead of the first cut predicted by Westpac, NAB, and ANZ.
While no one can be sure when a downward rate move might come – not even the RBA – the prospect of a rate cut Down Under continues to push home loan interest rates in a southerly direction.
Here're the latest interest rate moves home loan holders and would-be borrowers should know about.
Bendigo Bank slashes fixed rates, bumps variable offering
Regional major Bendigo Bank slashed many of its fixed rate offerings this week, but its moves likely left a sour taste for borrowers hunting for a variable rate home loan.
The bank upped the variable rate on its Express home loan for owner-occupiers making principal and interest repayments by 8 basis points.
The new rate on the product is 6.09% p.a. (6.22% p.a. comparison rate*).
In better news for would-be borrowers, the advertised rates on the bank's one and two year fixed rate products for owner-occupiers making principal and interest repayments were dropped by 45 basis points.
Rates on both its basic Express home loan product and its Complete home loan offering, which comes with an offset account, saw the following cuts:
| Fixed period | Product | Change | New rate | Comparison rate* |
|---|---|---|---|---|
| One year | Express | -45bp | 5.84% | 6.19% |
| Complete | -45bp | 5.84% | 6.42% | |
| Two years | Express | -45bp | 5.54% | 6.11% |
| Complete | -45bp | 5.54% | 6.32% |
Ubank also cuts fixed rates
NAB-backed ubank also dropped its one and two year fixed rates for owner-occupiers this week.
Its new advertised rates include:
| Fixed period | Change | New rate | Comparison rate* |
|---|---|---|---|
| One year | -15bp | 5.85% | 5.94% |
| Two years | -30bp | 5.55% | 5.87% |
AMP drops fixed rates for owners and investors
If you're after a longer fixed rate period, AMP's latest rate cuts might pique your interest.
The banking and financial services company dropped the fixed rates on its Professional Package home loan product by as much as 45 basis points.
The package comes with an offset account and demands an annual fee of $349.
Changes for owner-occupiers making principal and interest repayments include:
| Fixed period | Change | New rate | Comparison rate* |
|---|---|---|---|
| One year | -25bp | 5.94% | 7.19% |
| Two years | -30bp | 5.79% | 7.04% |
| Three years | -20bp | 5.79% | 6.91% |
| Five years | -45bp | 5.79% | 6.69% |
Meanwhile, changes for investors making principal and interest or interest only repayments include:
| Fixed period | Repayment type | Change | New rate | Comparison rate* |
|---|---|---|---|---|
| One year | P&I | -25bp | 6.09% | 7.21% |
| IO | -25bp | 6.24% | 7.22% | |
| Two years | P&I | -20bp | 5.89% | 7.06% |
| IO | -24bp | 6.00% | 7.07% | |
| Three years | P&I | -25bp | 5.84% | 6.93% |
| IO | -20bp | 6.04% | 6.98% | |
| Five years | P&I | -35bp | 5.99% | 6.78% |
| IO | -30bp | 6.19% | 6.86% |
BoQ lowers fixed rates by up to 20 basis points
Finally, Bank of Queensland (BoQ) made a second home loan rate move in as many weeks.
After cutting some offerings to under 6.00% p.a. last week, the bank dropped its discounted fixed rates for owner-occupiers new to the bank with loan-to-value ratios (LVRs) of 80% or less to as low as 5.59% p.a.
This week's changes to the bank's discounted fixed rates are as follows:
| Fixed term | Change | New rate | Comparison rate* |
|---|---|---|---|
| Two years | -20bp | 5.59% | 6.39% |
| Three years | -10bp | 5.59% | 6.29% |
| Four years | -10bp | 5.89% | 6.33% |
| Five years | -10bp | 5.89% | 6.29% |
BoQ-backed ME Bank also dropped fixed rates on its Members Equity package product by up to 20 basis points this week, mirroring many of its parent company's moves.
Owner-occupiers signing on for a two or three year fixed rate period might be able to secure a rate of 5.59% p.a. from the digital bank (comparison rates* vary from 6.47% p.a. to 6.53% p.a.).
Meanwhile, investors fixing their rate for two or three years could now realise an interest rate of 5.79% p.a. from ME Bank – whether or not they're making principal and interest or interest only repayments (comparison rates* vary from 6.85% p.a. to 6.93% p.a.).
Other movers
- Bank of China dropped select fixed and variable rates by 10 basis points
- Horizon Bank lowered certain fixed rates by up to 10 basis points
- Community First Bank dropped some fixed rates by 20 basis points
- Summerland Bank lowered standard fixed rates by up to 15 basis points
- MyState Bank dropped select fixed and variable rates by up to 55 basis points
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6.04% p.a. 6.06% p.a. $2,408 Principal & Interest Variable $0 $530 90% 5.99% p.a. 5.90% p.a. $2,396 Principal & Interest Variable $0 $0 80% 6.14% p.a. 6.16% p.a. $2,434 Principal & Interest Variable $0 $350 60% Important Information and Comparison Rate Warning 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 . Lender Home Loan Interest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option Link Compare
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