There are still rate increases filtering through to loans despite there being no Reserve Bank cash rate hike in December, Canstar outlined in its weekly report.
Steve Mickenbecker (pictured), group executive for financial services at Canstar, said the lowest home loan rate on Canstar is at 5.69%, which is 1.21% below the average rate. “This is almost the equivalent of five 0.25 percent rate cuts,” he said. “The RBA has made clear that it doesn’t expect to be easing the cash rate until late 2024 at the earliest, making five rate cuts unlikely until well into 2025. That’s way too long to wait for decent interest rate relief and borrowers have to take matters into their own hands and give themselves a rate cut.”
Five lenders have increased 18 owner occupier and investor variable rates by 0.07%, while two lenders, Bankwest and Suncorp Bank, have decreased by an average of 0.10%. Meanwhile, Bank Australia increased 22 owner occupier and investor fixed rates by an average of 0.24%, and UpBank decreased by 0.59%.
The average variable interest rate for owner occupiers paying principal and interest is 6.90% for 80% LVR. The lowest variable rate for any LVR is 5.69% (offered by The Capricornian and The Mutual Bank).
Nineteen (19) rates are below 5.75% on Canstar’s database, down from 20 the previous week.
“Switching from the average rate to the lowest… can deliver monthly savings of $394 for a $500,000 loan on a 30-year term. That is enough to cover a huge chunk of the other cost-of-living increases we’ve had to swallow,” said Mickenbecker.
Canstar’s Consumer Pulse Report revealed 9% of borrowers have switched lenders in the past year to save money and that a further 21% have negotiated a better rate from their bank, according to the report. “Those borrowers have shown the way, that it can be done and it’s time the majority followed suit,” Mickenbecker added.
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