It could be the pre-Christmas wind down, or maybe lenders aren't expecting any cash rate action until well into 2025, but there was little movement in home loan interest rates this week.
Last week, ANZ cut rates on its Simplicity Plus home loans by up to 15 basis points, dropping them to some of the lowest variable rates among the big four.
This week, it was smaller lenders adjusting their rates downwards – Bank of Sydney cutting some of its variable rates and The Mac dropping certain fixed rates.
The stillness was perhaps fitting as there was little news afoot on the market this week apart from Wednesday's release of the October monthly inflation figures.
Inflation data leaves the market unmoved
The October data, as with any month immediately after a quarterly data release, was not highly regarded by the market.
It doesn’t contain the full basket of the Consumer Price Index and is considered ‘goods heavy’, at a time when services inflation is largely driving Australia’s inflation rate.
The annualised headline inflation read came in at 2.1%, the same as the September monthly reading, although the measure of underlying inflation – the trimmed mean number – came in higher at 3.5%, up from 3.2% the previous month.
NAB economists say this rise was largely because electricity, recording a 35.6% annual plunge in price, was stripped out of the reading, while last year’s big fall in October travel prices also dropped out of calculations.
NAB now expects inflation will be a little softer than the Reserve Bank of Australia has forecast in the December quarter.
Not that it’s likely to move the RBA board to make a surprise pre-Christmas interest rate cut to cheer the punters when it next meets on 9-10 December.
In fact, economists and analysts are busy pushing back their forecasts of an interest rate cut until mid-2025 – and that’s before they gauge how another Donald Trump presidency may affect world financial markets.
But there is little the RBA can do about that at this stage, though RBA governor Michele Bullock assures us the board will be watching closely.
So, with that, let’s check the detail of this week’s interest rate movements on the mortgage market.
Bank of Sydney slashes higher LVR rates by more than 1%
You can always count on Bank of Sydney to make a bit of a splash with its rate movements.
The foreign-owned bank has cut the variable rates on its Expect More home loans for both owner occupiers (OO) and investors, with those with loan-to-value ratios (LVRs) greater than 80% realising cuts of more than 100 basis points.
Here are the new rates for those making principal and interest (P&I) repayments:
| Product | Change | New rate | Comparison rate* |
|---|---|---|---|
| Expect More OO Variable P&I LVR 80-90% | -1.01% | 6.54% p.a. | 6.69% p.a.* |
| Expect More Investment Variable P&I LVR 80-90% | -1.16% | 6.99% p.a. | 7.13% p.a.* |
Bank of Sydney is also offering a new advertised Expect More variable rate of 7.09% (7.23% p.a. comparison rate*) to owner occupiers with an LVR up to 95% making P&I repayments.
Those turning to an Expect More loan with LVRs above 80% may need to pay for lenders mortgage insurance (LMI).
The Mac cuts fixed rates by up to 20 bp
NSW-based The Mac credit union trimmed its Standard Fixed one- and three-year home loan rates.
Its best new rate is now 5.99% p.a. (7.42% p.a. comparison rate*) for owner occupiers taking out a three-year fixed loan with an LVR of up to 95%.
Here are The Mac’s new rate changes:
| Product | Change | New Rate | Comparison Rate* |
|---|---|---|---|
| Standard Fixed 1 year | -0.1% | 6.29% p.a. | 7.81% p.a.* |
| Standard Fixed 3 year | -0.1% | 5.99% p.a. | 7.42% p.a.* |
| Investment Standard Fixed 1 year | -0.1% | 6.39% p.a. | 7.82% p.a.* |
| Investment Standard Fixed 3 year | -0.2% | 6.09% p.a. | 7.45% p.a.* |
The Mac fixed rate loans come with a redraw facility, although fees may apply if borrowers make additional payments over a certain amount.
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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 | 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 | |||||||||
5.69% p.a. | 6.16% p.a. | $2,899 | Principal & Interest | Fixed | $0 | $530 | 90% |
| Promoted | Disclosure |
Image by Riccardo Pitzalis via Unsplash
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