Add CategoryThe plunge in fixed mortgage rates continues, with Bank of Queensland the latest major lender to cut rates below 6%.
Smaller lenders began cutting fixed rates several months ago, perhaps in a bid to lure borrowers tired of waiting for a cut in the Reserve Bank of Australia cash rate.
Although the trickle was steady, it was only when the first of the big banks NAB slashed its advertised fixed rates in late July that it was game-on in the market.
The big banks sprang into action with Macquarie, Westpac, and CommBank all jumping on the bandwagon, making sizeable slashes to their fixed rates.
Big bank-owned brands like NAB's ubank and CommBank's Bankwest unsurprisingly followed suit as did global players ING and HSBC.
This week, it's the turn of Australia's sixth-largest home lender Bank of Queensland.
BoQ fixed-rate home loan changes
Here are the new rates for owner occupiers making P&I payments:
| Term | Change (%) | New rate | Comparison rate* |
|---|---|---|---|
| 3 years fixed | -0.05 | 6.04% p.a. | 6.41% p.a. |
| 3 years fixed discount rate (max 90% LVR) | -0.05 | 5.69% p.a. | 6.31% p.a. |
| 4 years fixed | -0.15 | 6.34% p.a. | 6.49% p.a. |
| 4 years fixed discount rate (max 90% LVR) | -0.15 | 5.99% p.a. | 6.37% p.a. |
| 5 years fixed | -0.15 | 6.34% p.a. | 6.49% p.a. |
| 5 years fixed discount rate (max 90% LVR) | -0.15 | 5.99% p.a. | 6.34% p.a. |
BoQ's new lowest fixed rate for investors is 5.79% p.a. (6.48% comparison rate*), fixed for three years for loans up to 90% LVR.
It's also for new-to-bank borrowers only with all BoQ's discounted rates only available for a limited time.
This week's rate drops aren't the first fixed rate cuts Australia's sixth-largest home lender has made.
After a round of fixed rate cuts last month, Bank of Queensland has revised some of its rates even lower with its limited time discount rates for three, four, and five-year terms all under the 6% mark for new owner occupiers making principal and interest (P&I) repayments.
Its best new rate is its 5.69% p.a. discount rate (6.31% p.a. comparison rate) for new-to-bank borrowers with loan-to-value ratios (LVR) <80%, fixed for three years.
New borrowers with lower deposits taking out LVR 80-90% loans can also access the discounted rate but will have to pay lenders mortgage insurance (LMI).
The rate is among the market's lowest although still 10 basis points higher than Macquarie's latest three-year fixed rate of 5.59% p.a. (6.01% p.a. comparison rate*) although that's for ≤70% LVR.
It matches Macquarie's three-year fixed rate for ≤80% loans.
Loans.com.au joins market's lowest
Not to be outdone, the online non-bank lender is mixing it with the big players, matching BoQ's three-year fixed rate with a special rate of 5.69% p.a. (6.16% p.a. comparison rate*) to owner occupiers making P&I repayments.
The rate is available to borrowers with a 10% deposit and can be split with a variable rate.
Loans.com.au allows borrowers to make up to $10,000 a year in extra payments on fixed loans.
In the interest of full disclosure, both Your Mortgage and loans.com.au are part of the Firstmac Group.
Queensland Country Bank also trims 3-year fixed rate
The member-owned bank has launched its lowest rate of 5.89% p.a. (6.55% p.a. comparison rate*) fixed for three years - a cut of 10 basis points.
The rate is available to new borrowers with <80% LVR and making P&I repayments as part of the bank's Ultimate Home Loan Package (Fixed) special offer.
The deal comes with an annual fee of $395 and provides a 100% mortgage offset and redraw facility for owner occupiers.
Meantime, Queensland Country Bank has lifted its fixed rate package investment loans by up to 20 basis points.
Credit Union SA joins the fray
Finally, Credit Union SA has sliced 10 basis points off its three-year fixed package loan rate to 5.89% p.a. (6.65% p.a. comparison rate*) for owner occupiers making P&I repayments.
Borrowers with deposits as low as 3% are also eligible for the rate but LMI will be added to the home loan amount.
Credit Union SA's home loan packages come with an annual fee of $395 but charge no application, settlement, or renegotiation fees.
The credit union has also cut up to 25 basis points off its two- and three-year fixed loans for owner occupiers and investors making P&I and interest only payments.
Image by Tom Rumble on Unsplash
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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 | Additional Repayments | Split Loan Option | Link | Compare | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.69% p.a. | 6.16% p.a. | $2,319 | Principal & Interest | Fixed | $0 | $530 | 90% | Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,396 | Principal & Interest | Variable | $0 | $0 | 80% | Disclosure | |||||||||
6.14% p.a. | 6.16% p.a. | $2,434 | Principal & Interest | Variable | $0 | $350 | 60% | Disclosure |
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 . View disclaimer.