Seven lenders have collectively reduced 82 fixed rates for both owner-occupiers and investors by an average of 0.25%, Canstar reported.
The move comes as the average variable interest rate for owner-occupiers paying principal and interest holds at 6.82%, with Abal Banking maintaining the lowest variable rate at 5.75% (excluding introductory rates).
According to Canstar, there has been a rise in competitive offerings, with 190 rates now below 5.75%, up from 181 the previous week. Below is the list of lenders with rates below 5.75%.
This increase underscores a growing trend toward more favourable loan conditions for potential home buyers and investors. For the lowest variable home loan rates on the Canstar database, see the table below.
Households are awaiting the Reserve Bank’s first meeting of the year, anticipating a rate cut for financial relief. Since November, the OCR has stood at a 13-year high of 4.35%, following RBA’s intense rate-hiking cycle to curb inflation.
Canstar analysis suggested that a hypothetical single borrower earning the average full-time wage could borrow approximately $12,000 more if the cash rate were reduced to 4.1% and this cut were passed on to new customer variable rates.
“A cash rate cut today will boost people’s home buying budgets across the country, and while any rise will be relatively modest, it's likely to lift confidence in the market and potentially coax buyers back in,” said Sally Tindall (pictured above), Canstar data insights director.
Tindall also pointed out the delicate balance of supply and demand influencing property prices.
“Property prices often boil down to supply and demand,” she said. “If more buyers pile back into the market in key hot spots, prices are likely to rise on this tide.”
Additionally, she advised potential buyers on how to enhance their borrowing prospects.
“Cutting up your credit card, cleaning up your expenses, and looking for a low-rate mortgage can all help improve your chances of getting approved for your loan,” Tindall said.
For existing borrowers, a rate cut could mean noticeable relief in monthly budgets.
“A rate cut in February could inject $92 a month back into the budget of someone with a $600,000 mortgage, with potentially more RBA cuts waiting in the wings,” Tindall said.
The Canstar leader encourages borrowers to contact their banks to ensure any rate cuts are passed on to them, potentially reducing their monthly repayment obligations.
