The cash rate has been paused once again, but that doesn’t mean home loan interest rates have stagnated.
The Reserve Bank of Australia (RBA) board met on Tuesday to deliberate over the cash rate, ultimately keeping it steady it at 4.10% for a fourth consecutive month.
But that didn’t stop home loan lenders from shaking rates up.
If you’re in the market for a new mortgage, you’ll probably want to keep these updates in mind.
Macquarie Bank hikes fixed rates by up to 26 basis points
First out to bat is Macquarie Bank – the nation’s fifth biggest bank – which bolstered many of the fixed rates available on its home loan offerings by as much as 26 basis points.
While 26 basis points doesn’t sound like much, it can make a big difference to a borrower’s bottom line.
The difference payable on a 6% per annum (p.a.) interest rate on a $300,000 home loan with a 30-year term compared to another with a 6.26% p.a. interest rate is close to $20,000 over the loan’s life, according to Savings.com.au’s Refinance Calculator.
If you’re an owner-occupier, these changes might pique your interest (pun not intended):
- Basic Fixed Owner-Occupied principal and interest (P&I) 70%-80% loan-to-value ratio (LVR) 5 years: 24 basis point increase to 6.39% p.a. (6.17% p.a. comparison rate*)
- Basic Fixed Owner-Occupied P&I 70%-80% LVR 2 years: 20 basis point increase to 6.45% p.a. (6.07% p.a. comparison rate*)
- Offset Fixed Owner-Occupied P&I ≤70% LVR 1 year: 10 basis point increase to 6.45% p.a. (6.20% p.a. comparison rate*)
- Basic Fixed Owner-Occupied P&I 80%-95% LVR 4 years: 26 basis point increase to 6.65% p.a. (6.93% p.a. comparison rate*)
Meanwhile, property investors’ heads might turn at these changes: - Basic Fixed Investment PI ≤70% 3 years: 20 basis point increase to 6.45% p.a. (6.22% p.a. comparison rate*)
- Basic Fixed Investment PI 80%-90% LVR 5 years: 26 basis point increase to 6.75% p.a. (7.05% p.a. comparison rate*)
- Basic Fixed Investment interest only (IO) ≤70% 2 years: 20 basis point increase to 6.69% p.a. (6.44% p.a. comparison rate*)
- Offset Fixed Investment PI 80%-90% 2 years: 20 basis point increase to 6.79% p.a. (7.40% p.a. comparison rate*)
MyState Bank lowers some fixed rates by nearly 1%
Tasmanian-based MyState Bank, one of Australia’s smaller banks (it's 19 times smaller than Macquarie, by market capitalisation), dropped the interest rates on many of its fixed rate home loan products by as much as 95 basis points.
Take a squiz at the headliners:
- Residential Fixed 80%-90% LVR 3 years: 95 basis point increase to 6.24% p.a. (7.66% p.a. comparison rate*)
- Residential Fixed IO ≤80% 3 years: 55 basis point decrease to 6.84% p.a. (7.84% p.a. comparison rate*)
- Investment Fixed 80%-90% 3 years: 85 basis point decrease to 6.44% p.a. (7.72% p.a. comparison rate*)
- Investment Fixed IO 80%-90% LVR 2 years: 65 basis point decrease to 6.74% p.a. (7.94% p.a. comparison rate*)
Mutual banks shake things up by up to 50 basis points
Finally, multiple customer owned banks made home loan interest rate moves this week.
Following on with our fixed rate theme, Victoria’s Bank First dropped fixed home loan rates by up to 50 basis points.
Have a look at some of its more ‘interesting’ changes:
- Premier Package Fixed Home Loan P&I 80%-90% LVR 2 years: 50 basis point decrease to 6.14% p.a. (6.86% p.a. comparison rate*)
- Complete Fixed Home Loan P&I ≤80% 2 years: 40 basis point decrease to 6.14% p.a. (6.05% p.a. comparison rate*)
- Complete Fixed Home Loan Investment 90%-95% LVR 2 years: 50 basis point decrease to 6.59% p.a. (6.66% p.a. comparison rate*)
- Premier Package Fixed Home Loan Investment 80%-90% LVR 2 years: 50 basis point decrease to 6.49% p.a. (7.32% p.a. comparison rate*)
Meanwhile, fellow mutual lender Great Southern Bank made some notable changes with its variable interest rates, take a look:
- Investment Offset Variable P&I 80%-90% LVR: 40 basis point decrease to 6.49% p.a. (6.55% p.a. comparison rate*)
- Investment Basic Variable IO 70%-80% LVR: 35 basis point decrease to 6.39% p.a. (6.31% p.a. comparison rate*)
- Offset Variable P&I 70%-80% LVR: 5 basis point increase to 6.24% p.a. (6.30% p.a. comparison rate*)
- Basic Variable IO 70%-80% LVR: 10 basis point increase to 6.89% p.a. (6.41% p.a. comparison rate*)
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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. | 6.08% 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 |
Image by todd kent on Unsplash.
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