Major banks and smaller lenders make rate changes, offering both cuts and hikes across products
Australia’s mortgage market saw notable adjustments to interest rates, with both reductions and increases by various lenders over the past week.
The latest RateCity interest rates weekly wrap-up showed that five lenders reduced at least one home loan rate, while four raised rates, reflecting ongoing competition in the mortgage market.
GMCU reduced its owner-occupied (OO) fixed two-year principal and interest (P&I) rate by 0.20 percentage points to 5.69%. The Mac cut its one-year fixed OO P&I rate by 0.10 percentage points to 6.29%.
On the other hand, AMP raised its packaged OO fixed two-year P&I rate by 0.10 percentage points to 5.89%, while Tiimely increased its OO variable P&I rate for loans with LVR under 90% by 0.05 percentage points to 5.99%.
ANZ, one of the country’s major banks, also lowered rates on its Plus and Simplicity Plus home loans by up to 0.15 percentage points on Friday. However, the changes apply only to new customers.
The move follows similar actions by other big banks. Last week, NAB cut its lowest variable home loan rate by up to 0.40 percentage points, while CommBank reduced its lowest variable rate by up to 0.15 percentage points in August.
ANZ already had the lowest advertised variable rate among the big four banks. With the latest adjustment, its digital offering for refinancers now sits at 6.09%. CBA’s lowest variable rate stands at 6.15%, with Westpac and NAB slightly higher at 6.44%.
Fixed rate offerings from the big four show more diversity. ANZ is offering the lowest rates across multiple fixed terms, including a two-year rate at 5.74% and a three-year rate at 5.74%. NAB and Westpac both advertise three-year fixed rates at 5.89%, while CBA lags with its three-year option starting at 6.29%. For five-year fixed terms, Westpac and NAB lead with a rate of 5.89%, outpacing ANZ’s 5.99% and CBA’s higher offering at 6.69%.
Despite these reductions, borrowers may find more competitive rates outside the big four. According to RateCity, more than 40 lenders now offer at least one variable home loan rate below 6%.
The lowest advertised variable rates include Abal Bank at 5.75%, Police Bank, Bank of Heritage Isle, and Border Bank at 5.84%, Bank of China at 5.88%, and The Mutual Bank and RACQ at 5.89%. These rates generally apply to owner-occupier loans with principal and interest repayments.
For fixed rate borrowers, competitive options include Geelong Bank offering 5.50% for a one-year term, Easy Street at 5.49% for two years, SWS Bank at 4.99% for three years, People’s Choice Credit Union at 5.49% for four years, and Heritage Bank at 5.49% for five years.
“Australians have been actively seeking out better home loan rates for themselves since the first cash rate hike in May 2022,” said Laine Gordon (pictured above), money editor at RateCity.com.au. “Our analysis of RBA data shows the average owner-occupier on a variable home loan rate has negotiated or refinanced their way out of three standard cash rate hikes – or 0.77 percentage points.
“On Wednesday, the monthly CPI indicator printed at 2.1% in the 12 months to October 2024, which was the lowest reading since July 2021. Inflation is moving in the right direction. However, the RBA will want to see more than one good quarterly inflation outcome before it puts rate cuts back on the agenda. That means waiting until at least the February 2025 board meeting, or borrowers taking matters into their own hands before then.”
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