Variable home loan rates tumble despite another RBA rate hold
Several non-major lenders adjusted their home loan rates this week, with 10 providers reducing at least one rate and three raising rates, according to financial comparison website RateCity.com.au.
The majority of changes occurred in the fixed rate sector, with notable reductions in one- and two-year fixed rates. Credit Union SA, Police Bank, and Bank Australia all introduced substantial cuts, bringing some rates below the 6% mark.
Bank Australia dropped one of its fixed rates to 5.84%, but increased rates across most of its other fixed rate loans. This comes in the same week that Bank Australia announced its acquisition of Australian Unity’s banking division, a deal expected to close by late 2025.
Among the big four banks, ANZ leads with a rate of 6.14% in variable rates, followed closely by CBA at 6.15%. Westpac’s lowest variable rate is slightly higher at 6.44%, though it offers a two-year period before adding a 0.4% margin, while NAB’s rate is at 6.79%.
In the fixed rate category, the lowest advertised one-year fixed rate is from Westpac at 6.09%, while CBA lists at 6.39%. NAB and ANZ both set their one-year fixed rates at 6.29% and 6.14%, respectively. For two-year fixed terms, ANZ leads at 5.74%, followed by Westpac at 5.89% and NAB at 6.04%, with CBA’s rate is the highest among the major banks at 6.29%.
Three-year fixed rates show CBA, Westpac, and NAB all offering 5.89%, while ANZ edges lower at 5.74%. For longer terms, the four-year and five-year rates show a similar spread, with rates mostly ranging between 5.89% and 6.69%.
SWS Bank currently leads the market with the lowest advertised three-year fixed rate at 4.99%. For shorter fixed terms, Geelong Bank offers a 5.50% rate for a one-year fixed loan, while Easy Street provides a 5.49% two-year fixed option. For longer commitments, both People’s Choice Credit Union and Heritage Bank advertise a five-year fixed rate at 5.49%.
The latest RateCity interest rates weekly wrap-up also showed that Abal Bank continued to offer a variable rate of 5.75% – the most competitive among lenders. Police Bank, Bank of Heritage Isle, and Border Bank follow closely, each with a 5.84% rate.
Bank of China and The Mutual Bank have advertised rates at 5.88% and 5.89%, respectively, keeping them within reach of the most competitive offers. Other lenders, including RACQ, also present a 5.89% rate, adding to the options for borrowers seeking lower rates.
“Variable home loan rates are starting to tumble, despite no change to the cash rate in 12 months,” said Laine Gordon (pictured above), money editor at RateCity.com.au. “The RBA might be set on a holding pattern for now, however, a handful of lenders took the knife to variable rates this week, including BankVic, loans.com.au and People’s Choice.
“RateCity.com.au research shows around 70 lenders have cut at least one variable home loan rate in the past 12 months, including two of the major banks – CBA and NAB. There are now 34 banks that have at least one variable home loan under 6%, with one of the lowest ongoing variable rates starting at 5.75%.”
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