Home loan interest rates fall even further on fixed-rate deals
Mortgage interest rates are continuing to tumble giving borrowers deals they have never seen before, and fixed-rate deals are growing increasingly attractive as they become the banks’ ‘new battleground’.
Banking
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Home loan fixed rates have fallen further after ANZ today lowered more deals down into the “2” per territory.
The big bank today revealed they have slashed 1, 3, 4 and 5 fixed- rate deals for owner occupiers paying principal and interest.
Some offers have been cut by up to 0.59 percentage points.
They also slashed investor loan rate deals.
ANZ’s three year fixed-rate deals on their Breakfree packages – which most customers are on – have fallen by 0.59 percentage points to just 2.29 per cent.
While their five-year fixed rates for owner occupiers paying principal and interest has fallen by 0.39 percentage points to just 2.84 per cent.
Financial comparison website RateCity spokeswoman Sally Tindall said “fixed rates are the new battleground”
“Already a handful of lenders have gone one better than the big banks, cutting fixed rates to a new record low of 2.09 per cent,” she said.
“Fixed rates are at record lows but we could see them drop even further, particularly if the challenger banks are serious about taking market share from the big four.”
Ms Tindall said she expected more home loan customers to fix in the coming months.
“With rates this low, against an uncertain economic backdrop, I wouldn’t be surprised if more people start opting to fix, to take advantage of these record low rates but also to have the comfort of knowing exactly what their monthly repayments will be,” she said.
“Fixed rates are typically a lot less flexible – with caps on how much extra you can tip into your mortgage and costly break fees if you want to get out early,.”
Home Loan Experts’ managing director Otto Dargan said lenders were continuing to drop deals during in an incredibly competitive market.
“We’ve seen intense competition between lenders to offer market leading fixed rates in the last few weeks,” he said.
“This is a clear message to borrowers that the banks think that low rates are here to stay.
“It’s now a great time to refinance or switch to a fixed-rate loan if you don’t plan on selling your property or making large extra repayments.
“Most economists aren’t predicting any more rate cuts so with fixed rates at historic lows and well below variable it’s looking like a great time to fix.”
The Reserve Bank of Australia cut the cash rate to 0.25 per cent last month however many lenders failed to pass on any of these cuts to variable rate customers.
ANZ was the only of the big four banks to pass on cuts of 0.15 percentage points to variable rate home loan customers.
BIG FOUR DEALS
Two year fixed rates
ANZ 2.19 per cent
NAB 2.19 per cent
Westpac 2.19 per cent
CBA 2.29 per cent
Three year fixed rates
Westpac 2.19 per cent
ANZ 2.29 per cent
Westpac 2.29 per cent
CBA 2.29 per cent
Five year fixed rates
ANZ 2.69 per cent
Westpac 2.69 per cent (70 per cent loan-to-value)
NAB 2.79 per cent
CBA 2.99 per cent
Source: RateCity.com.au.
Originally published as Home loan interest rates fall even further on fixed-rate deals