RateCity reports ‘mixed bag of rate changes’

Cuts and hikes mark a week of market fluctuations

RateCity reports ‘mixed bag of rate changes’

After several weeks of minimal movements, mortgage rates saw varied changes over the past week, with RateCity.com.au reporting both reductions and increases in rates.

“It was a mixed bag of rate changes this week,” said Sally Tindall (pictured), research director at RateCity.com.au. “A handful of lenders have cut select fixed rates, as is to be expected, with the biggest drops coming from BOQ subsidiary ME Bank of up to 0.60 percentage points.

“Offsetting this, however, the BOQ group also made some surprise, albeit smaller, hikes to select fixed rates.”

The latest weekly interest rates wrap-up from the financial comparison website also showed an adjustment in variable rates for new customers by AMP Bank, decreasing rates for owner-occupiers with substantial loans and deposits. However, it also raised rates on specific loans for investors and those with interest-only loans by a slight 0.05 percentage points.

Focusing on the big four banks, RateCity found the Commonwealth Bank of Australia (CBA) offering a basic variable rate of 6.59% and Westpac presenting a two-year fixed rate at 6.44%. The National Australia Bank (NAB) and the Australia and New Zealand Banking Group (ANZ) have variable rates at 6.84% and 6.54%, respectively.

Fixed rate offerings for one to five years from the major banks demonstrate a range between 6.59% to 6.84%, with HSBC and Australian Mutual providing more competitive rates in the market. HSBC’s one-year fixed rate stands at 5.79%, and Australian Mutual offers a two-year fixed rate at 5.63%. The five-year fixed rate is lowest with RACQ at 5.64%.

Among the lenders with the lowest advertised variable rates, Abal Bank leads with a rate of 5.75%, followed closely by G&C Mutual Bank at 5.80% and a group including Police Bank, Bank of Heritage Isle, and Border Bank at 5.84%.

“While fixed rates are broadly on their way down, the latest ABS lending indicator data shows borrowers aren’t taking the bait,” Tindall said. “Just 1.4% of new and refinanced loans in February opted for a fixed rate – a new record low. 

“Refinancing, however, has staged a very small but potentially significant comeback, with the value of refinancing increasing for the first time in seven months. This could be the first sign these figures are starting to stabilise into their new norm after almost two years of high refinancing activity.”

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