Why are some banks and lenders now cutting mortgage rates?

A number of banks have passed on increases or decreases in mortgage rates to fixed or variable loans over the past week.

Australians looking to refinance are now being shunned by banks, with fixed rate cuts touted as an option to provide security against RBA cash rates and variable rate increases.

The preference for variable rate mortgages, however, remains strong according to the latest ABS lending data with variable loan commitments amounting to more than $52 billion in June, compared to $5 billion for fixed loans.

Unloan CEO Daniel Oertli said that by cutting fixed rates, lenders are looking to capture market share over the next few years.

“Fixed rates allow most lenders to predict that they’ll retain that customer for the duration of the fixed rate, given the costly break-up fees associated with refinancing during that time,” Oertli told Savings.com. .to.

“Fixed rates are now generally much higher than variable rates, so you have to make that trade-off as a customer whether you’re willing to pay a much higher rate now for a fixed fixed term or knowing that the rates variables increase, still take advantage of the savings offered by choosing the variable.”

See also: Mortgage statistics

ING lowers its fixed and variable rates by up to 0.50% per year

ING has reduced fixed and variable rates for homeowners and investors on principal and interest (P&I) and interest-only (IO) loan options.

Highlights of ING’s portfolio for homeowners include:

  • Residential Fixed 4 Years ≤80%: Decline of 50 basis points to 5.09% per year (comparative rate of 4.19% per year*)
  • Orange Residential Advantage Fixed 4 Years ≤ 80%: Decline of 50 basis points to 4.99% per year (comparative rate of 4.45% per year*)
  • Advantage Orange Variable P&I 150-499k 80%: Decrease of 10 basis points to 3.74% per year (comparative rate of 4.06% per year*)
  • Orange Advantage Variable IO 150-499k: Decrease of 10 basis points to 4.39% per year (comparative rate of 4.70% per year*)

For investors, the changes include:

  • 4-year fixed P&I investment: Decline of 50 basis points to 5.19% per year (comparative rate of 4.69% per year*)
  • Fixed Investment IO 4 Years: Decline of 50 basis points to 5.39% per year (comparative rate of 4.74% per year*)
  • Orange Advantage Variable P&I Investment 150-499k: Decrease of 10 basis points to 3.99% per year (comparative rate of 4.31% per year*)
  • Investment Orange Advantage Variable IO 150-499k: Decrease of 10 basis points to 4.29% per year (comparative rate of 4.60% per year*)

Bank of us lowers the variable rate to 0.20% per year

Tasmanian lender Bank of us cut a variable rate mortgage by 20 basis points.

The FlexiDiscount home loan up to 95% LVR has been reduced to 4.19% pa (comparison rate 4.25% pa*)

Otherwise, the bank increase in variable rates on home loans for homeowners and investors.

Highlights of these changes include:

  • FlexiDiscount 80%: Increase of 50 basis points to 3.79% per annum (comparative rate of 3.81% per annum*)
  • Upper line 80%: Increase of 50 basis points to 3.99% per year (comparative rate of 4.01% per year*)
  • FlexiChoice investment ≤80%: Increase of 40 basis points to 3.99% per year (comparative rate of 4.15% per year*)

Bankwest cuts its fixed and variable rates by up to 0.70% per year

Bankwest cut fixed and variable rates for homeowners and investors only on P&I loans.

Highlights of these changes to Bankwest’s home loan portfolio include:

  • Premium Select OO P&I home loan 80%: Decrease of 10 basis points to 3.79% per year (comparative rate of 3.81% per year*)
  • Premium Select Home Loan Investment P&I 80% $20,000+: Decrease of 10 basis points to 4.19% per year (comparative rate of 4.21% per year*)
  • Complete mortgage at fixed rate Owner occupant P&I 2 years ≤80%: Decrease of 70 basis points to 4.99% per year (comparative rate of 5.20% per year*)

Suncorp cuts fixed rates by up to 0.76% per year

Suncorp has reduced fixed rates for homeowners and investors on P&I and IO loan options.

Key changes to Suncorp’s fixed rate portfolio include:

  • P&I fixed 2 years 95%: Decrease of 50 basis points to 5.84% per year (comparative rate of 6.73% per year*)
  • Fixed I/O 2 years 90%: Decrease of 16 basis points to 6.43% per year (comparative rate of 6.82% per year*)
  • Home Package Plus P&I Fixed 2 Years ≤80% Special Offer: Decline of 50 basis points to 5.39% per year (comparative rate of 4.57% per year*)
  • Fixed P&I investment 2 years 90%: Decrease of 56 basis points to 6.04% per year (comparative rate of 7.12% per year*)
  • Fixed Investment IO 2 Years 90%: Decrease of 76 basis points to 6.24% per year (comparative rate of 7.16% per year*)
  • Investment Home Package Plus P&I Fixed 2 Years ≤80% Special Offer: Decline of 56 basis points to 5.59% pa (comparative rate of 4.83% pa*)

Bank of Queensland cuts fixed rates by up to 1.30% a year

The Bank of Queensland (BOQ) has cut fixed rates for homeowners and investors on P&I loans.

Highlights of these changes to BOQ’s home loan portfolio include:

  • Residential Fixed 4 Years 98%: Decrease of 110 basis points to 5.34% per year (comparative rate of 5.15% per year*)
  • 4-year residential fixed discount rate Decline of 100 basis points to 4.99% per year (comparative rate of 5.01% per year*)
  • 4-year fixed P&I investment: Decrease of 130 basis points to 5.64% per year (comparative rate of 5.37% per year*)
  • 4-year fixed P&I investment Discount rate Decline of 85 basis points to 5.29% pa (comparative rate of 5.26% pa*)

AMP increases fixed rates by up to 0.65% per year

Taking the opposite route, AMP increased fixed home loan rates for homeowners and investors on P&I and IO loans.

The main changes include:

  • Basic fixed P&I 1 year: Increase of 65 basis points to 5.34% per year (comparative rate of 4.76% per year*)
  • Basic fixed IO 1 year: Increase of 65 basis points to 5.74% per year (comparative rate of 4.52% per year*)
  • Base investment P&I fixed 1 year: Increase of 65 basis points to 5.39% per year (comparative rate of 5.11% per year*)
  • Fixed base investment IO 1 year: Increase of 55 basis points to 5.39% per year (comparative rate of 4.67% per year*)

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Are you buying a house or looking to refinance? The table below shows home loans with some of the lowest interest rates on the market for homeowners.



Lender


Variable More details

Variable Housing Loan (LVR
  • 30% minimum deposit
  • No monthly or ongoing fees, add 0.10% compensation
  • Unlimited redraws

Variable More details
REFINANCING ONLY

Variable Rate Home Loan – Refinance Only

  • A low variable rate home loan from a 100% online lender. Supported by the Commonwealth Bank.
Variable More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees – None!
  • Unlimited additional refunds
  • Easy online application, quickly find out if you are approved!
  • Redraw – Access your extra payments if you need them
  • Use the app for loan information to help you pay off your home loan faster

Careful variable real estate loan (capital and interest) (LVR
  • No ongoing fees – None!
  • Unlimited additional refunds
  • Easy online application, quickly find out if you are approved!
  • Redraw – Access your extra payments if you need them
  • Use the app for loan information to help you pay off your home loan faster

Variable More details
NO CONTINUING FEES
  • No ongoing fees – None!
  • Unlimited additional refunds
  • Easy online application, quickly find out if you are approved!
  • Redraw – Access your extra payments if you need them
  • Use the app for loan information to help you pay off your home loan faster

Yard PAYG home loan (principal and interest) LVR ≤ 80%

  • No ongoing fees – None!
  • Unlimited additional refunds
  • Easy online application, quickly find out if you are approved!
  • Redraw – Access your extra payments if you need them
  • Use the app for loan information to help you pay off your home loan faster


Basic criteria: a loan amount of $400,000, variable, fixed, principal and interest (P&I) real estate loans with an LVR (loan-to-value) ratio of at least 80%. However, the “Compare mortgages” table allows calculations to be made on the variables selected and entered by the user. All products will list the LVR with the product and price list which is clearly published on the product supplier’s website. Monthly repayments, once the basic criteria are modified by the user, will be based on the advertised prices of the selected products and determined by the loan amount, repayment type, loan term and LVR as entered by the user. user/you. *The comparison rate is based on a loan of $150,000 over 25 years. Please note: this comparison rate is only true for this example and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different comparison rate. Rates correct as of August 24, 2022. See disclaimer.


Image by Pat Whelen via Unsplash

The whole market has not been taken into account in the selection of the above products. Instead, a reduced portion of the market was considered. Products from some vendors may not be available in all states. To be considered, the product and price must be clearly published on the product supplier’s website. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au and Performance Drive are part of the Savings Media group. In the interest of full disclosure, Savings Media Group is associated with Firstmac Group. To learn how Savings Media Group handles potential conflicts of interest, as well as how we are paid, please visit the website links at the bottom of this page.

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