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Australia's 'fifth bank' threw down the gauntlet on Tuesday morning, plunging its fixed home loan rates for owner occupiers and investors.
Its range of owner-occupier fixed rate loans have undergone hefty cuts of between 46 and 76 basis points, signalling to the market Macquarie is not content with its 5.3% share of the home lending market.
The new rate on the bank's basic one-year fixed rate loan for owner occupiers with a loan-to-value ratio (LVR) of 80% or less making principal and interest (P&I) repayments is 5.99% p.a. (6.19% p.a. comparison rate*).
That's a 76-basis point drop from the old level, putting it in the under-6% club for fixed rate loans and among the most competitive on the market.
Rates were also dropped to 5.89% p.a. for borrowers with LVRs of 80% or less signing onto fixed rate terms of between two and five years (comparison rates* vary from 6.08% p.a. to 6.16% p.a. depending on length of fixed term).
Some fixed rate home loans with offset accounts offer the same advertised basic rates for owner occupiers, although come with higher comparison rates, bumped up by a $248 annual fee for offset loans.
Investor loans slashed
A wide range of Macquarie's fixed investor loans saw rates dropped by between 56 and 70 basis points.
Some investor home loan rates have even been cut to below 6%.
The interest rate on a basic fixed investor loan, for those making P&I repayments with an LVR of up to 70%, is down to 5.99% p.a. for fixed periods of two, three, and four years (comparison rates* of 6.52% p.a., 6.49% p.a., and 6.46% p.a. respectively).
Macquarie forges ahead in home lending market
Macquarie's full-year result for the year ended 31 March 2024 showed the bank's home loan portfolio had grown 10% on the previous year to a value of $119.3 billion.
Its full-year financial report showed the growth had been largely driven by lower-LVR and owner-occupier lending.
Just three years prior, Macquarie's lending book was almost half the size at $67 billion.
The bank's growing market share in home lending has largely come at the expense of its big four rivals, whose advertised rates are considerably higher.
A major part of Macquarie's success in the home lending market has been attributed to its technology-driven processes, allowing it to achieve impressive loan turnaround times (typically around a day).
Fixed rate movement
Fixed rates have generally been on the nose with borrowers so far in 2024, with many seemingly betting on interest rates falling on the back of slowing inflation.
In fact, fixed loans accounted for less than 2% of new home lending by value for most of the year.
However, the latest lending data from the ABS shows an uptick in fixed rate lending to approximately 2.7% of new loans written in June.
This suggests borrowers might be losing hope a cut in interest rates is coming any time soon.
In recent months, some home lenders have been dropping fixed rates in a bid to lure borrowers to lock in their home loans.
Just last month, National Australia Bank became the first of the big four banks to cut fixed term rates in 2024.
It took 60 basis points off its Tailored three-year fixed P&I loan, dropping the rate on the product to as low as 5.99% p.a. (6.64% p.a. comparison rate*) for those with LVRs of 70% or less.
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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 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.69% p.a. | 6.16% p.a. | $2,899 | Principal & Interest | Fixed | $0 | $530 | 90% |
| 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 Bruce Mars on Unsplash
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