Fixed rates trending up, variable rates going down
Three lenders increased a range of fixed rates this week across one- to five-year terms, according to RateCity’s interest rates weekly wrap-up.
G&C Mutual raised its Momentum Owner-Occupied Variable Principal and Interest (P&I) LVR 60%-80% product by 0.09% to 6.09%. Heritage Bank’s Home Advantage Owner-Occupied Fixed three-year P&I LVR was increased by 0.20% to 5.99%, while Police Credit’s Owner-Occupied Fixed one-year P&I LVR <80% was hiked by 0.20% to 6.09%.
“While the hikes were all from smaller lenders, this is the fourth consecutive week the fixed rate hikes have outnumbered the cuts – a trend that is likely to continue in the months ahead as the RBA, and the market, mull over the possibility of another cash rate hike,” said Sally Tindall (pictured above), research director at RateCity.
“While fixed rates have started nudging higher, market competition is forcing some banks to shave down their variable rates to keep new business coming in the door.”
Four lenders — Heritage Bank, Auswide, People's Choice, and Greater Bank — cut various new customer variable rates this week. Greater Bank reduced its lowest variable rate from 6.19% to a competitive 6.04%, including a cashback offer of $2,500 for loans over $500,000.
“This is yet another sign there is still plenty of heat in the mortgage market, despite the fact the value of refinancing activity is now around $5 billion a month lower than it was at the peak, according to ABS figures,” Tindall said.
The RateCity report also identified the lowest advertised fixed rates for various terms. Queensland Country Bank offers the lowest one-year rate at 5.74%. Australian Mutual provides the lowest two- and three-year rates at 5.53% and 5.48%, respectively. Up Bank offers a four-year rate of 5.80%, while RACQ provides the lowest five-year rate at 5.59%.
Among variable rates, the lowest advertised include Abal Bank at 5.75%, G&C Mutual Bank at 5.80%, Police Bank, Bank of Heritage Isle, and Border Bank at 5.84%, and both Pacific Mortgage Group and The Mutual Bank at 5.89%.
Meanwhile, the major banks’ lowest advertised rates vary. The lowest variable rates are 6.15% at CBA, 6.44% (for two years, then increases by 0.4 percentage points) at Westpac, 6.79% at NAB, and 6.14% at ANZ.
For one-year fixed rates, all four banks offer a rate of 6.59%. Two-year fixed rates range from 6.49% (Westpac) to 6.84% (CBA). Three-year fixed rates are uniformly at 6.59%, while four-year fixed rates range from 6.59% (Westpac and NAB) to 6.74% (CBA and ANZ). Five-year fixed rates are 6.69% (CBA, Westpac) to 6.84% (ANZ).
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