In a dynamic week for home loan interest rates, several financial institutions have adjusted their offerings, reflecting a mixed but generally positive outlook for borrowers, Canstar reported.
Last week, The Mutual Bank revised two of its home loan products, slightly increasing owner-occupier and investor variable rates by an average of 0.08%.
On the flip side, a more substantial wave of reductions was seen across the board, with six lending institutions cutting a total of 60 owner-occupier and investor variable rates by an average of 0.3%.
In parallel, fixed-rate mortgages have also experienced notable adjustments.
Five lenders have collectively reduced 68 fixed rates for owner-occupiers and investors by an average of 0.29%. These changes reflect a cautious but proactive approach in the lending market.
See table below for the list of home loan rate movements over the past week.
The current average variable interest rate for owner-occupiers making principal and interest payments stands at 6.56%.
However, the lowest variable rate available, particularly for any loan-to-value ratio (LVR), is a competitive 5.59% offered by Pacific Mortgage Group, exclusive of introductory, first-time home buyer, and eco-focused rate discounts.
The database maintained by Canstar now boasts 375 rates under 5.75%, marking an increase from 358 the previous week.
See the list of lenders offering rates under 5.75%:
Sally Tindall (pictured above), Canstar’s data insights director, discussed the latest home loan trends following the RBA’s first monetary policy decision of the year, which cut the official cash rate by 0.25 basis points to 4.1%, reaching a 16-month low.
“The majority of the RBA-led variable rate cuts have now taken place, with six lenders cutting 60 variable rates over the last week,” Tindall said.
HSBC and Community First Bank are among the latest to adjust, offering new competitive variable rates as low as 5.74%.
Tindall also highlighted the movement in fixed rates following recent cash rate cuts, with the lowest two- and three-year fixed rates now standing at an appealing 5.29%.
Despite these reductions, the prospect of future rate cuts by the RBA might hold borrowers back from locking in rates, especially given the minor uptick in core inflation from 2.7% to 2.8% in January.
“No cause to sound the alarm but certainly no reason to double down with another cut,” Tindall said, suggesting a wait-and-see approach for the upcoming RBA meeting on March 31.
With expectations of further cuts by then, the RBA is carefully navigating economic signals to maintain stability and confidence in a fluctuating financial environment.
