Both owner-occupiers and even investors benefit from rate cuts although position of the major banks remains unclear
.jpg)
Both owner-occupiers and even investors benefit from rate cuts although position of the major banks remains unclear
January saw twice as many rate cuts as rate hikes, new data from CANSTAR shows.
Rates were cut across the board; with an average decrease of 19 basis points for owner occupiers and 30 basis points for investor P&I. Interest only rates also saw discounts, of 32bp on average.
The average basic variable rate for owner-occupier P&I now stands at 4.22%, with some rates as low as 3.58%; fixed rates were cheaper still. For investor P&I the average basic variable stands at 4.67%, with the lowest rate at 3.88%, according to CANSTAR.
“It is good to see the non-banks, second tier and small lenders supporting home borrowers,” said FBAA executive director Peter White. “But at the same time, it is disappointing the big banks like ANZ seem disinterested in trying to work with borrowers by doing the opposite and putting their rates up.”
What about the big banks?
ANZ increased its rates in January for one to five year fixed loans and fixed owner occupier and investment loans by up to 20 basis points. Nevertheless, new customers to both ANZ and CBA can still access sub-4% rates.
The Australian Financial Review reported that the big four have built a $600m ‘war chest’ to fund discounts and win market share. Discounts will be targeted at owner-occupiers with LVRs of 80% or less.
FBAA executive director White has poured cold water on the news, however. “Nothing comes for free and if it seems too good to be true it probably is,” he said. “If what is being reported is the case, then this, in essence, enables the banks to buy business to increase their databases and profits.
Make hay while the sun shines
Non-majors have begun the year with high profile offers, with HSBC offering a 3.59% variable loan for owner-occupiers, with Auswide and ME bank offering similarly low rates. The Auswide and ME rates apply to loans up to 90% LVR.
This is not the first time the market has seen a rush of discounting, followed by hikes. In 2015 JP Morgan’s Australian Mortgage Industry Report warned that changing capital requirements would make ‘lazy repricing’ of loans an unsustainable, particularly for the major banks.
This week APRA announced that it would be implementing the latest round of Basel bank capital requirements in Australia, although material changes would likely wait until 2019.
January saw twice as many rate cuts as rate hikes, new data from CANSTAR shows.
Rates were cut across the board; with an average decrease of 19 basis points for owner occupiers and 30 basis points for investor P&I. Interest only rates also saw discounts, of 32bp on average.
The average basic variable rate for owner-occupier P&I now stands at 4.22%, with some rates as low as 3.58%; fixed rates were cheaper still. For investor P&I the average basic variable stands at 4.67%, with the lowest rate at 3.88%, according to CANSTAR.
“It is good to see the non-banks, second tier and small lenders supporting home borrowers,” said FBAA executive director Peter White. “But at the same time, it is disappointing the big banks like ANZ seem disinterested in trying to work with borrowers by doing the opposite and putting their rates up.”
What about the big banks?
ANZ increased its rates in January for one to five year fixed loans and fixed owner occupier and investment loans by up to 20 basis points. Nevertheless, new customers to both ANZ and CBA can still access sub-4% rates.
The Australian Financial Review reported that the big four have built a $600m ‘war chest’ to fund discounts and win market share. Discounts will be targeted at owner-occupiers with LVRs of 80% or less.
FBAA executive director White has poured cold water on the news, however. “Nothing comes for free and if it seems too good to be true it probably is,” he said. “If what is being reported is the case, then this, in essence, enables the banks to buy business to increase their databases and profits.
Make hay while the sun shines
Non-majors have begun the year with high profile offers, with HSBC offering a 3.59% variable loan for owner-occupiers, with Auswide and ME bank offering similarly low rates. The Auswide and ME rates apply to loans up to 90% LVR.
This is not the first time the market has seen a rush of discounting, followed by hikes. In 2015 JP Morgan’s Australian Mortgage Industry Report warned that changing capital requirements would make ‘lazy repricing’ of loans an unsustainable, particularly for the major banks.
This week APRA announced that it would be implementing the latest round of Basel bank capital requirements in Australia, although material changes would likely wait until 2019.
