11 Lenders Cut Rates as Australia Banks Cut Mortgage Rates
Australia banks cut mortgage rates for new customers even as the Reserve Bank of Australia is expected to hold the cash rate next week. Since the RBA last hiked in May, 11 lenders have cut at least one variable home loan rate, giving borrowers more sub-6 per cent options to compare before they lock in a deal.
11 Lenders Cut Since May
11 lenders have lowered at least one variable home loan rate for new customers since May, and ING and BOQ are among them. Sally Tindall, Canstar data insights director, said lenders had “taken the knife” to new customer rates in a bid to lure new business in the door.
40 lenders are now offering at least one variable rate under 6 per cent. Westpac is among the Big Four banks offering at least one variable rate under that level, a clear shift for borrowers shopping across the mainstream lenders instead of waiting on the RBA to move first.
NAB Drops August Hike Call
NAB scrapped its previous forecast for one final hike in August and now says the cash rate has reached the peak of the cycle at 4.35 per cent. NAB chief economist Sally Auld said, “The next move in the cash rate is likely to be down, but the timing is uncertain,” after the bank moved its rate view to a cut in the second quarter of next year.
3.6 per cent is where NAB now sees the cash rate ending next year, after cutting its old call for another increase. Commonwealth Bank is pencilling in rate cuts in May and August next year, ANZ expects the cash rate to stay on hold for the rest of the year, and Westpac is still forecasting two more hikes in August and September, though that view is under review.
Fixed Rates Move Differently
Last week, ANZ and Macquarie Bank cut selected fixed home loan interest rates, while Westpac and NAB recently hiked fixed home loan rates. Fixed pricing is moving in both directions, which leaves variable loans as the sharper competitive front for borrowers looking for a lower entry rate now rather than waiting for the central bank’s next decision.
Sally Tindall said, “While existing customers will naturally be a bit miffed by such moves, what this tells us is that competition in the mortgage market is heating back up and there are discounts to be had for those willing to play ball,” and that pressure should keep new-customer pricing in focus if lenders continue to chase business ahead of the RBA meeting next week. “The RBA is set to pull the handbrake on the cash rate next week, and while the conversation has shifted to when the first cut might arrive, the reality is we're still a long way from the central bank shifting it in reverse.”
