NAB's ubank and CBA's Bankwest both cut fixed rates for owner occupiers and investors - ubank by up to 73 basis points and Bankwest by up to 50.
But neither went quite so low as Macquarie Bank which is now offering 5.59% p.a. for a two-year fixed rate loan (details below).
It comes just weeks after Macquarie slashed its fixed rates by up to 76 basis points in yet another sign Australia's fifth-largest lender is out to snare an even bigger share of the mortgage market.
But not to be outdone, another of the country's top 10 home lenders ING also took the axe to its fixed rates and a couple of variable rates for good measure.
In just over a month, NAB, CBA, Macquarie, and Westpac have all made rather dramatic cuts to their fixed rates.
They followed a trickle of smaller lenders who started the trend and many more have since jumped on the southbound train.
Lower rates to revive a weak economy?
It's a ray of hope for homeowners that perhaps interest rates are heading lower after all despite the Reserve Bank of Australia's clear message that a cut to the cash rate won't be happening any time soon.
RBA governor Michele Bullock was sticking to her guns even after Wednesday's national accounts figures which showed Australia's economy has slowed to a crawl, growing just 0.2% in the June quarter.
Both household savings and spending have fallen, even on essentials such as food.
The figures were worse than the RBA had forecast but we'll have to wait until later this month to see if it brings any change of tone on the cash rate from the RBA board.
So, in what's been a busy week on the mortgage market, let's check the latest rate movements.
Ubank slashes fixed and variable rates
With NAB being the first of big banks to take the axe to its advertised fixed mortgage rates in July, its digital-only offering ubank followed the leader.
As well as sending its fixed rates considerably lower, it also made more modest drops to its Flex variable home loans.
Here are the new rates for owner occupiers making principal and interest (P&I) repayments:
| Product | Change (%) | New rate | Comparison rate* |
|---|---|---|---|
| Flex Variable P&I <60% LVR | -0.05 | 6.09% p.a. | 6.33% p.a. |
| Flex Variable 60-70% LVR | -0.05 | 6.14% p.a. | 6.38% p.a. |
| Flex Variable P&I 70-80% LVR | -0.05 | 6.14% p.a. | 6.38% p.a. |
| Flex Variable P&I 80-85% LVR | -0.1 | 6.64% p.a. | 6.88% p.a. |
Ubank's best fixed rate for owner-occupiers paying P&I is now 5.79% p.a. (6.28% p.a. comparison rate*) for 60-80% loan-to-value ratio (LVR) loans fixed for three years, a drop of 20 basis points.
ING cuts fixed, variable rates
ING also joined the fixed rate plunge on Thursday, cutting its Residential, Orange Advantage, and Investment Fixed Rates by up to 60 basis points.
Its best Residential Fixed rate for owner-occupiers paying P&I with a LVR of ≤80% is 5.79% p.a. (6.07% p.a. comparison rate*), fixed for three years.
Most of its Residential Fixed rates for longer terms (two to five years) are now under the 6% p.a. mark, including rates for borrowers with 80-90% LVRs.
Notably, ING also sliced five basis points off its variable rates for owner occupiers with deposits as low as 10%.
The rate for borrowers making P&I repayments with 80-90% LVR is now 6.34% p.a. for Mortgage Simplifier (6.37% p.a. comparison rate*) and Orange Advantage loans (6.62% p.a. comparison rate*) over $150,000.
Orange Advantage loans come with an offset account.
Bankwest cuts fixed rates by up to 50 basis points
After CommBank lowered its advertised fixed rates last month, its wholly owned brand Bankwest followed this week, dropping up to half a percentage point from its Fixed and Complete Fixed home loans for both owner occupiers and investors.
Bankwest's best new rate is 5.89% p.a. - a drop of 50 basis points - for 80% LVR owner occupiers signing up to its Complete Fixed Home Loan package (7.14% p.a. comparison rate* for two years fixed; 7.05% p.a. comparison rate* for three years fixed).
The package offers up to nine 40% offset accounts and a fee-free credit card for an annual fee of $395.
Macquarie's new 5.59% fixed rate
It was only a few weeks ago that Macquarie followed NAB to send its fixed rate home loans plummeting by up to 76 basis points.
But this week, it's gone further, seemingly to ensure its fixed rates are among the market's lowest.
Macquarie is now offering an eye-catching 5.59% p.a. for ≤70% LVR owner occupier loans fixed for two years (6.06% p.a. comparison rate*) or three years (6.01% p.a. comparison rate*).
Here's a rundown of the new owner occupier rates:
| Fixed period | LVR | Change (%) | New rate | Comparison rate* |
|---|---|---|---|---|
| One year | ≤70% | -0.10 | 5.79% p.a. | 6.13% p.a. |
| One year | ≤80% | -0.10 | 5.89% p.a. | 6.18% p.a. |
| One year | ≤95% | -0.10 | 6.15% p.a. | 7.10% p.a. |
| Two years | ≤70% | -0.20 | 5.59% p.a. | 6.06% p.a. |
| Two years | ≤80% | -0.20 | 5.69% p.a. | 6.12% p.a. |
| Two years | ≤95% | -0.20 | 6.09% p.a. | 6.99% p.a. |
| Three years | ≤70% | -0.20 | 5.59% p.a. | 6.01% p.a. |
| Three years | ≤80% | -0.20 | 5.69% p.a. | 6.07% p.a. |
| Three years | ≤95% | -0.20 | 6.09% p.a. | 6.89% p.a. |
ME Bank drops variable rates
Among the subsidiaries of larger home lenders dropping rates, the Bank of Queensland-owned ME Bank has sliced up to 1.11% off its Basic and Member Package Flexible home loans for both owner occupiers and investors.
ME's Basic Home Loan rate is now 6.34% p.a. (6.36% p.a. comparison rate*) for owner occupiers making P&I repayments on 80-90% LVR loans, a drop of five basis points.
Its Member Package Flexible rate has dropped 10 basis points to 6.49% p.a. (6.87% p.a. comparison rate*) for owner occupiers making P&I repayments on 80-90% LVR loans of between $150,000-$400,000.
ME's biggest rate drops were reserved for investor loans.
Other rate movers
Also cutting rates on the mortgage market this week:
- The merged Heritage Bank and People's Choice Bank trimmed fixed rates by up to 10 basis points.
- Teachers Mutual Bank, along with its affiliates Firefighters Mutual, Health Professionals Bank, and UniBank, dropped rates on Your Way investment and owner occupier home loans by 20 basis points.
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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 | |||||||||
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 Matt Reames on Unsplash
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