There’s cause for cautious optimism among home buyers this week with a host of smaller lenders cutting their home loan interest rates.
On Wednesday, official Wage Price Index figures showed wages in Australia grew 4.2% over 2023, the highest annual increase for more than 15 years.
It was also the first time since March 2021 that wages saw higher annual growth than CPI inflation which came in at 4.1% for the December quarter.
Many banks and non-bank lenders have been lowering their mortgage rates ahead of a widely forecast drop in the cash rate in the second half of the year.
That’s despite the Reserve Bank of Australia adopting a hawkish tone at its first meeting for 2024 earlier this month.
It seems the lending market is not waiting to see what happens so let’s check which lenders have varied their mortgage rates this week.
ING applies the slasher
The global banker, known for its competitive rates, has dropped fixed and variable rates on a raft of its home loan products.
The ING Investment interest only loan fixed for three years with a loan-to-value (LVR) ratio ≤80% saw the biggest cut of 40 basis points, taking the rate to 6.29% p.a. (6.31% p.a. comparison rate*).
Fixed rate loans underwent the largest drops, particularly across the investor segment.
ING’s Orange Advantage Residential variable principal and interest (P&I) loans also saw falls, as follows:
- Orange Advantage Variable P&I LVR ≤80% down by 5 basis points to 6.14% p.a. (6.43% p.a. comparison rate*)
- Orange Advantage Variable P&I LVR 80-90% down by 10 basis points to 6.39% p.a. (6.67% p.a. comparison rate*)
- Orange Advantage Variable P&I LVR 90-95% down by 15 basis points to 6.69% p.a. (6.97% pa. comparison rate*)
ING’s Mortgage Simplifier P&I residential loan products also saw similar cuts.
Mortgage Simplifier P&I LVR ≤80% loans for amounts from $150,000 to $2 million are all five basis points lower at 6.14% p.a. (6.17% p.a. comparison rate*).
Adelaide Bank cuts fixed interest rates up to 0.2%
Adelaide Bank has chopped 20 basis points from most of its fixed rate home loan products with the investment segment seeing most of the action.
Here are the new rates for its SmartFix owner-occupier loans which come with a 100% offset facility:
- SmartFix P&I LVR up to 95% fixed for one year dropped 15 basis points to 6.29% p.a. (6.28% p.a. comparison rate*).
- SmartFix P&I LVR up to 95% fixed for two years dropped 15 basis points to 6.29% p.a. (6.30% p.a. comparison rate*).
- SmartFix P&I LVR up to 95% fixed for three years dropped 20 basis points to 6.29% p.a. (6.31% p.a. comparison rate*)
- SmartFix P&I LVR up to 95% fixed for four years dropped 20 basis points to 6.39% p.a. (6.37% comparison rate*)
- SmartFix P&I LVR up to 95% fixed for five years dropped 20 basis points to 6.39% p.a. (6.39% comparison rate*)
AMP Bank cuts mortgage rates up to 0.40%
AMP Bank also got in on the action late in the week, announcing cuts to various fixed and variable home loan rates by up to 40 basis points on Friday.
Here are the new rates of some of its Essential Home Loans for owner occupiers.
- Essential Home Loan variable LVR ≤60% $250,000-$750,000, down by 20 basis points, to 6.34% p.a. (6.37% p.a. comparison rate*)
- Essential Home Loan variable VLR 60-80% $250,000-$750,000, down by 20 basis points, to 6.44% p.a. (6.44% p.a. comparison rate*)
- Essential Home Loan variable VLR 60-90% $250,000-$750,000, down by 15 basis points, to 6.49% p.a. (6.52% p.a. comparison rate*)
G&C Mutual Bank Essential Worker loan falls to 5.8%
The customer-owned bank has slashed the rate on its Essential Worker P&I owner-occupied variable home loan by 24 basis points to an eye-catching 5.8% p.a. (5.83% p.a. comparison rate*).
Essential Worker home loans comes with a 100% offset account, no establishment or monthly fees, and the rate applies to loans up to 95% LVR.
G&C Mutual Bank’s First Home Buyer Special Offer P&I loan has also dropped 29 basis points to 5.9% p.a. (5.93% comparison rate*).
The Special Offer applies to first home buyer loans up to 95% LVR with a loan term of 25 years.
Unity Bank cuts fixed rates up to 0.8%
Another member-owned bank made big drops to its fixed home loan rates this week.
Unity Bank’s Advantage P&I and interest only loans fixed for three years with LVRs ≤95% were both cut 80 basis points to fall under the 6% mark at 5.99% p.a. (7.6% comparison rate*).
The bank’s Advantage Plus and First Home Buyer Advantage Plus three-year fixed P&I and interest only loans were also cut to 5.99% this week (7.6% p.a. comparison rate* for Advantage Plus loans; 6.95% p.a. comparison rate* for First Home Buyer P&I and 6.96% p.a. comparison rate* for First Home Buyer interest only).
Other lenders varying home loan rates
Mortgage House dropped fixed and variable rates up to 55 basis points this week.
Its Advantage Standard Fixed P&I 3 years Special, which fell 55 basis points, is now offering a rate of 5.99% (5.89% comparison rate*) for loan amounts greater than $100,000.
Tiimely Home Loans, backed by Bendigo & Adelaide Bank, dropped its fixed interest rates up to 56 basis points.
AMO Group also dropped its fixed rates on a range of residential and investment fixed home loans by up to 56 basis points.
Also this week, Victorian-based mutual bank Bank First cut rates on a wide range of its fixed rate home loans by up to 35 basis points while Horizon Bank also dropped fixed rates by up to 20 basis points.
Image by Barra da Tijuca on Unsplash
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