There were no surprises in the RBA’s decision to hold the cash rate at 4.35% on Tuesday.
But analysts broadly agreed the tone of RBA governor Michele Bullock was slightly less hawkish than it was in February.
Some got a little excited at the wording of the board’s official announcement where the phrases “a further increase in interest rates cannot be ruled out” and “will do what is necessary to achieve that outcome” were removed.
Inflation still the enemy
Ms Bullock has been steadfast in saying core inflation needs to be in the target range of 2-3% and the path of interest rate movements to ensure that "remains uncertain", as does the timeframe.
She largely stuck to the script from the last meeting, saying the RBA board would continue to monitor the data and would not rule anything in or out.
Economists and market watchers are generally sticking with their forecasts that the next rate movement will be downward, sometime in the second half of the year.
Surely, home lenders weren’t waiting on anything more to come from the March board meeting – or could it be they’d acted earlier to get their new rates onto the market before all the fuss?
Let’s check how the two lenders who shifted interest rates this week responded.
Horizon Bank lives up to its name
The customer-owned bank hailing from the New South Wales south coast does indeed appear to be looking over the horizon, cutting both its fixed and variable rates this week.
Dropping fixed rates has been the flavour of the past few months; after all, who’s keen to be locked into a mortgage rate on the precipice of a downcycle?
But Horizon Bank has also cut its Home Sweet Home Introductory variable rates for principal and interest (P&I) and interest only (IO) owner occupier and investment home loans by 15 basis points.
The new rates for owner occupier loans are as follows:
| Product name | LVR | Rate change | New rate | Comparison rate* |
| Home Sweet Introductory Variable IO | ≤70% | -15 bp | 6.29% p.a. | 6.82% p.a.* |
| Home Sweet Introductory Variable IO | >70% | -15 pb | 6.44% p.a. | 6.97% p.a.* |
| Home Sweet Introductory Variable P&I | ≤70% | -15 bp | 6.09% p.a. | 6.63% p.a.* |
| Home Sweet Introductory Variable P&I | >70% | -15 bp | 6.24% p.a. | 6.77% p.a.* |
Not surprisingly, Horizon’s fixed rates have fallen a little further with a 25-basis point cut across a range of owner occupier and investment loans.
Here are some of the new fixed rate offers for owner occupiers:
| Product name | LVR | Rate change | New rate | Comparison rate* |
| Fixed Rate Home Loan 1 year | ≤70% | -25 bp | 5.89% p.a. | 6.64% p.a.* |
| Fixed Rate Home Loan 2 years | ≤70% | -25 bp | 5.79% p.a. | 6.57% p.a.* |
| Fixed Rate Home Loan 1 year | >70% | -25 bp | 6.04% p.a. | 6.79% p.a.* |
| Fixed Rate Home Loan 2 years | >70% | -25 bp | 5.94% p.a. | 6.71% p.a.* |
Credit Union SA investor packages heading north
South Australia’s third largest credit union Credit Union SA has increased the rates on its Investment Variable Home Loan Package Special Offer.
Interest only loans have gone up 25 basis points while principal and interest loans have been hiked 10 basis points.
The new rates are as follows:
| Product name | LVR | Rate change | New rate | Comparison rate* |
| Variable Home Loan Package Special Offer P&I Investment | ≤80% | +10 bp | 6.29% p.a. | 6.66% p.a.* |
| Variable Home Loan Package Special Officer IO Investment | ≤80% | +25 bp | 6.49% p.a. | 6.88% p.a.* |
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| 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 | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.06% p.a. | $3,011 | Principal & Interest | Variable | $0 | $530 | 90% | 4.6 Star Customer Ratings |
| Promoted | Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,995 | Principal & Interest | Variable | $0 | $0 | 80% | Apply in minutes |
| Promoted | Disclosure | |||||||||
6.09% p.a. | 6.11% p.a. | $3,027 | Principal & Interest | Variable | $0 | $250 | 60% |
| Promoted | Disclosure | ||||||||||
5.69% p.a. | 6.16% p.a. | $2,899 | Principal & Interest | Fixed | $0 | $530 | 90% |
| Promoted | Disclosure |
Image by Pat Whelan on Unsplash
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