While home loan borrowers have been counting the cost of rising variable mortgage rates over the past couple of months, there is good news in the fixed rate segment of the market, where rates are going down.
The latest Mozo Banking Roundup reports that there have been “many more cuts than increases” in fixed home loan rates over the past month.
In the fixed rate market, Commonwealth Bank, ANZ, Heritage Bank and Qudos Bank are among the lenders that cut rates last month.
Commonwealth Bank cut fixed rates for owner-occupiers making principal and interest repayments: the two-year rate was cut 10 basis points to 3.79 per cent and the three-year rate was cut by 10 bps to 3.89 per cent.
For investors making interest only repayments CBA cut the three-year rate by 10 bps to 4.24 per cent.
ANZ has cut some of its owner-occupier P&I fixed rates by up to 24 bps and investor P&I fixed rates by up to 13 bps.
Qudos Bank took 10 bps off its four-year rate for owner-occupiers, which is now 4.09 per cent.
Heritage Bank cut two-year rates for owner-occupiers making P&I repayments by 14 bps to 3.65 per cent. For investors, it cut the two-year rate by 20 bps to 4.09 per cent.
Yellow Brick Road cut its three-year rates by 10 bps for a range of products.
However, Mozo cautions that despite all the activity, the best fixed rates in the market are “largely unchanged” over the past few months.
The rate leaders in the fixed rate markets are Greater Bank, which is offering 3.49 per cent for one year; IMB Bank and Heritage, which are offering 3.65 per cent for two years; Community First and Easy Street, which are offering 3.69 per cent for three years; FreedomLend and ING, which are offering 3.92 per cent for four years; and ING, which is offering 3.98 per cent for five years.
Over the past two months, 18 lenders increased viable rates, although none of the big banks have announced increases. In fact, last week ANZ cut its basic variable rate by 34 bps to 3.65 per cent.
ANZ’s rate of 3.65 per cent on its Simplicity Plus loans compares with 4.35 per cent for CBA’s Extra Home Loan, 3.69 per cent for NAB’s Basic Variable Rate Home Loan and 4.59 per cent for Westpac’s Flexi First Option Home Loan.
A couple of other lenders cut variable rates. UBank cut rates by up to 10 bps to 3.59 per cent.
Qudos Bank cut its Low Cost Home Loan Package for owner-occupiers by 10 bps, with the rate starting at 3.79 per cent.
The cheapest variable rate in the market is 3.44 per cent, which is available from BIDeloan and Reduce Home Loans.