Fixed rate home loans have been heading south for some months in anticipation that the RBA cash rate will eventually go the same way.
Not many expected it to be this month but the August CPI inflation figure of 2.7%, released the day after the RBA decision, showed the economic landscape is looking more amenable to an eventual rate cut.
In her post-decision media conference on Tuesday, RBA governor Michele Bullock indicated she wasn't all that interested in monthly inflation figures affected by temporary cost-of-living relief measures.
See also: RBA holds cash rate in September
She also took the opportunity to reiterate there would be no cut to the cash rate "in the near term".
So, we're back to that.
That didn't stop a handful of smaller lenders following the market in pushing their fixed home loan rates lower this week - one by up to 65 basis points.
Let's check the latest market movements.
Teachers mark down variable rates
The Teachers Mutual Bank group is the only institution to lower some of its variable rates this week.
The group has four divisions including UniBank, Firefighters Mutual, and Health Professionals Bank whose rates move in unison.
The group has shaved five basis points off some of its variable rates for its Your Way Basic and Your Way Plus home loans.
Here's a selection of the new rates:
| Product | Change (%) | New rate | Comparison rate* |
|---|---|---|---|
| Your Way Basic Home Loan P&I ≤80% LVR | -0.05 | 6.09% p.a. | 6.15% p.a. |
| Your Way Basic Home Loan P&I >80% LVR | -0.05 | 6.74% p.a. | 6.81% p.a. |
| Your Way Plus P&I 60-80% LVR | -0.05 | 6.24% p.a. | 6.54% p.a. |
| Your Way Plus P&I 80-90% LVR | -0.05 | 6.69% p.a. | 6.98% p.a. |
| Your Way Plus P&I 90-95% LVR | -0.05 | 6.94% p.a. | 7.23% p.a. |
There were much larger cuts to Your Way and Your Way Plus fixed rates, up to 25 basis points for both owner occupier and investor loans.
The best new fixed rate for a Your Way owner occupier loan is 6.09% p.a. (6.15% p.a. comparison rate*) for principal and interest (P&I) payments fixed for either three years (a 15-basis point drop) or four years (25 basis points lower).
Regional Australia Bank goes lower
The bank serving country New South Wales first made big cuts to its fixed home loan rates in early August but has again trimmed up to 25 basis point on many of its owner occupier and investor fixed rates.
Owner occupiers with a loan-to-value ratio (LVR) of between 70-80% paying principal and interest (P&I) can sign up to a two-year fixed rate of 5.69% p.a. (6.02% p.a. comparison rate*).
Here's a selection of some of the new rates for owner occupiers:
| Product | Change (%) | New rate | Comparison rate* |
|---|---|---|---|
| Fixed P&I LVR 70-80% 1 year | -0.11 | 6.07% p.a. | 6.10% p.a. |
| Fixed P&I LVR 70-80% 2 years | -0.21 | 5.69% p.a. | 6.02% p.a. |
| Fixed P&I LVR 70-80% 3 years | -0.21 | 5.57% p.a. | 5.95% p.a. |
| Fixed P&I LVR 70-80% 4 years | -0.20 | 5.67% p.a. | 5.95% p.a. |
| Fixed P&I LVR 70-80% 5 years | -0.19 | 5.77% p.a. | 5.95% p.a. |
Rates are lower for lower LVR loans and jump for LVRs greater than 80%.
Regional Australia Bank has also dropped rates for owner occupiers and investors making interest only (IO) repayments on fixed loans for up to five years.
Newcastle Permanent cuts up to 30 bp
Newcastle Permanent had also made modest cuts to its fixed rate loans in early August but has come back for a second dig, taking bigger slices off its rates this time around.
Its lowest new rate is 5.59% p.a., a special offer deal for owner occupiers making P&I payments and fixing for two years (7.93% p.a. comparison rate*) or three years (7.67% p.a. comparison rate*).
There are also special offer deals going for owner occupiers and investors opting to make interest only repayments.
Newcastle Permanent is still offering a $3,000 cashback deal to new or refinancing borrowers applying online.
See also: Home loan offers and deals September 2024
Military Bank falls into line
The Australian Military Bank joins ranks with its peers in cutting its fixed rates for owner occupiers and investors by up to 35 basis points.
The highlight is 5.99% p.a. (6.73% p.a. comparison rate*) for owner occupiers fixing for three years, a cut of 31 basis points.
The specialist military bank will generally lend to eligible borrowers with LVRs higher than 80% but those loans will attract lenders mortgage insurance (LMI).
Adelaide Bank pushes SmartSaver fixed rates under 6%
Although Adelaide Bank is perhaps better known as the other half of Bendigo and Adelaide Bank, the two banks offer different home loan products.
Adelaide Bank removed its home loan products from retail sale as at 30 June 2024 and now services the mortgage broker market (and existing home loan customers).
It's shaved up to 65 basis points off new SmartSaver Home Loans for P&I repayments fixed for one or two years.
Its lowest new rate is 5.64% p.a. (6.13% p.a. comparison rate*) fixed for two years.
Best to contact a mortgage broker if you're interested.
Advertisement
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 | Tags | Features | Link | Compare | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.69% p.a. | 6.16% p.a. | $2,319 | Principal & Interest | Fixed | $0 | $530 | 90% | Featured |
| Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,396 | Principal & Interest | Variable | $0 | $0 | 80% | Featured Apply in minutes |
| Disclosure | |||||||||
6.14% p.a. | 6.16% p.a. | $2,434 | Principal & Interest | Variable | $0 | $350 | 60% |
| Disclosure |
Image by Dillon Kydd on Unsplash
Ready, Set, Buy!
Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!
With bonus Q&A sheet and Crossword!
Harrison Astbury
Denise Raward
Rachel Horan
