Ahead of the Reserve Bank’s April rate decision, various lenders have implemented notable rate adjustments, impacting both owner-occupier and investor loan products.
Below is a detailed breakdown of the changes from Canstar.
Four lenders, including Australian Military Bank, BOQ, G&C Mutual Bank, and Unity Bank, reduced their variable rates for owner occupiers and investors, with cuts averaging 0.37%.
Meanwhile, Defence Bank and Summerland Bank have adjusted their fixed rates downward for new customers, with an average decrease of 0.31%.
“Rate cuts continue to trickle through with Australian Military Bank, BOQ, G&C Mutual Bank, and Unity Bank making cuts to variable rates,” said Sally Tindall (pictured), Canstar data insights director.
“Fixed rates have also seen a couple of nips and tucks over the last week with both Defence Bank and Summerland Bank lowering select new customer fixed-rate loans by an average of 0.31 percentage points.”
The average variable interest rate now stands at 6.53% for owner occupiers paying principal and interest, with Pacific Mortgage Group offering the lowest rate at 5.59% for any loan-to-value ratio, excluding special categories such as introductory, first-home buyer, and eco rates.
Canstar’s database showed 427 rates under 5.75%, a slight increase from last week. See table below for the list of lenders offering these low rates.
Tindall noted that while lenders continue to reduce both variable and fixed rates, the uncertainty about future rate cuts has made many borrowers hesitant to commit.
Tindall also anticipates the upcoming RBA meeting, with forecasts suggesting the cash rate will stay at 4.1%.
“[Today’s]’s RBA Board meeting might be a near certainty with the cash rate expected to remain on hold at 4.1%, however, all eyes will be on the language surrounding the decision in the statement at the post-meeting press conference,” she said.
“While the cash rate could well remain on hold in the coming months given the economic uncertainty, three of the big four banks believe the RBA will pull the hammer on a second cut for 2025 in its May meeting with two more to follow before the year’s end.”
“Cuts to the cash rate of this scale, if passed on, could see the monthly repayments of a variable rate borrower with a $600,000 mortgage and 25 years drop by a further $286 from here to December,” Tindall said. “While there’s plenty of borrowers who would relish this type of budget relief, three more cuts from the central bank is far from guaranteed.”
She advised borrowers to consider taking advantage of the competitive refinancing options available ahead of any further rate decisions by RBA.
