Expert says RBA rate cuts "unlikely to be imminent"
In a week marked by minimal activity in the home loan sector, only a handful of lenders made changes to their rates, the latest weekly interest rates wrap-up from RateCity.com.au has revealed.
According to Sally Tindall (pictured above), research director at RateCity.com.au, only three lenders have reduced select fixed rates in the past week, while one has increased variable rates.
“The most notable moves were from BankWest, which cut fixed rates by up to 0.30 percentage points,” Tindall said. “uBank also cut fixed rates by up to 0.65 percentage points, but also hiked select new customer variable rates by up to 0.10 percentage points. This puts uBank’s lowest variable rate at 6.14%.”
For variable rates, Abal Bank still leads with the lowest advertised rate at 5.75%, followed closely by G&C Mutual Bank at 5.8% and a trio including Police Bank, Bank of Heritage Isle, and Border Bank at 5.84%. Pacific Mortgage Group and Challenger Group both offer rates at 5.89%, indicating the narrow margin between the top contenders.
The fixed rate segment shows HSBC offering the lowest one-year fixed rate at 5.79%, while Australian Mutual Bank presents the lowest rates for two and three-year terms at 5.63% and 5.48% respectively. HSBC again comes forward with the best four-year fixed rate at 5.69%, and RACQ takes the lead for the five-year term at 5.64%.
Tindall said that the Reserve Bank of Australia’s (RBA) recent decision to maintain the current rates did not come unexpectedly.
“Cash rate cuts are unlikely to be imminent with the board taking a very cautious view as to when official rates might go down,” she said. “The big four banks all still expect at least one cash rate cut in the second half of the year, with CBA now saying the first cut, which it has pencilled in for September, could in fact come as early as August.
“That said, the RBA is likely to want to see how the stage three tax cuts play out across household budgets from July before providing more relief via cash rate cuts.”
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