Mortgage rate changes few as RBA holds cash rate

The mortgage market experienced minimal activity this week as lenders anticipated Tuesday’s Reserve Bank of Australia (RBA) cash rate decision, according to financial comparison website RateCity.com.au.

Rate cuts this week include Aussie Select’s Basic Investment Variable P&I loan, reduced by 0.40 percentage points to 6.84%, and Greater Bank’s Ultimate Owner-Occupier Fixed one-year P&I, reduced by 0.30 percentage points to 5.99%.

For the rate increases, MOVE Bank’s Everyday Owner-Occupier fixed three-year P&I rose by 0.35 percentage points to 6.14%, while Newcastle Permanent’s Real Deal Special Owner-Occupier Variable P&I and Greater Bank’s Great Rate Owner-Occupier Variable P&I both saw a 0.10 percentage point increase, setting new rates at 6.19%.

The Commonwealth Bank of Australia (CBA) offers the lowest variable rate among the big four banks at 6.15%. Westpac follows with 6.44%, which increases by 0.4 percentage points after two years. National Australia Bank (NAB) and ANZ have their lowest variable rates set at 6.79% and 6.14%, respectively.

For fixed rates, CBA and Westpac offer one-year fixes at 6.59%, while NAB and ANZ are slightly higher at 6.69%. The rates vary slightly across other fixed terms, with the two-year rates from 6.49% to 6.84% and five-year rates ranging from 6.69% to 6.84%.

Queensland Country Bank advertises the lowest one-year fixed rate at 5.74%, while Australian Mutual has the lowest two- and three-year fixed rates at 5.53% and 5.48%, respectively. RACQ offers a five-year fixed rate at 5.59%.

Abal Bank offers a variable rate of 5.75%, followed by G&C Mutual Bank at 5.80% and Police Bank, Bank of Heritage Isle, and Border Bank at 5.84%. Pacific Mortgage Group and The Mutual Bank offer rates of 5.89%.

“AMP pared back a range of its fixed rates, while Greater Bank cut its one-year fixed rate down to 5.99 per cent for owner-occupiers paying principal and interest,” said Sally Tindall (pictured), research director at RateCity.com.au. “This could be a bid by the bank to attract borrowers who are growing increasingly worried the forecasted cash rate cuts are still some time away.

“We know the RBA Board considered the case for a hike at this week’s meeting but ultimately decided to hold off from lifting the cash rate. The Reserve Bank is hoping to ride out this latest blip in inflation without a 14th rate rise, in a quest to protect as many jobs as possible and keep the economy on an even keel.

“However, the clock is ticking for the RBA. Another few rounds of higher-than-expected inflation data could force it to hike before the year is out, particularly if the upcoming government tax cuts and rebates prompt some households to increase their spending.”

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