Macquarie Bank reduced fixed loan rates as RBA pauses cash rate

A major Aussie bank has shocked customers in their latest interest rate update after the Reserve Bank offered some relief.

One of Australia’s biggest banks has cut their fixed rates - offering struggling Aussies a little glimmer of hope.

Macquarie Bank will reduce most of their fixed home loan interest rates for new loans by up to 0.3 per cent per annum.

After 10 consecutive rises, the Reserve Bank of Australia revealed they would be leaving the cash rate on hold at 3.6 per cent when it met on Tuesday.

Macquarie Bank has announced it will reduce interest rates on most fixed-rate loans. Picture: NCA Newswire

Macquarie Bank’s rates will come into effect from Thursday, with all current fixed rates approved before close of business today remaining the same.

The new fixed rates will drop as low as 5.29 per cent per annum for owner occupier principle and interest three-year loan terms at where the lending to value ratio is below 70%.

For investment loans it will drop to 5.49 per cent per annum.

Owner of CBM Mortgages, in Sydney’s eastern suburbs, Craig McDonald said: “We are now seeing the banks predicting we are near the peak of the RBA rate hikes and there could be some rate drops near the end of the year or start of next year.

“They are re-evaluating their offerings on their fixed rates knowing that consumers are not going to want to lock in at their current offerings when they are so similar to their current variable rate being offered.”

None of the big four Australians - including CBA, Westpac, ANZ and NAB - have passed on any interest rate changes to their customers since the announcement on Tuesday afternoon

RBA governor Philip Lowe said the decision to hold interest rates will give the Board more time to assess the state of the economy and the outlook, in an environment of “considerable uncertainty”.

The bank will be looking to trends in household spending, inflation and labour market data to determine what happens at it’s next meeting.

Despite the brief relief to homeowners, Mr Lowe warned the pause could lead to further rate pain later in the year.

“The Board expects that some further tightening of monetary policy may well be needed to ensure that inflation returns to target,” he said.

“The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”

NAB executive home ownership has urged borrowers to use the break to prepare for further rate rises. Picture: NCA Newswire /Gaye Gerard.

NAB’s executive of home ownership Andy Kerr told NCA NewsWire a further rate rise is anticipated later in the year, which would bring the cash rate up to 3.85 per cent.

“It is great to get a bit of certainty and stability over the Easter holidays. We do still think there‘s probably one more rise to come,” he said.

“Right now it‘s time for Australians to take advantage and prepare themselves a bit better for what might still be to come.”

He warned borrowers against a false sense of security and urged them to use the reprieve to prepare for another rate rise and what that would mean for their mortgage repayments.

The RBA will meet again in a month’s time, just before the next federal budget is announced in May.