But last week's rate cut "unlikely to move the needle with borrowers"
Seven lenders have reduced at least one fixed mortgage rate last week, financial comparison website RateCity.com.au has reported, in a flurry of rate changes aimed at attracting borrowers.
The most significant reduction came from Aussie Home Loans, which cut its lowest three-year fixed rate by 0.5 percentage points to 6.09%.
Despite the reduction, Sally Tindall (pictured), research director at RateCity.com.au, said it is unlikely to significantly impact borrower decisions, particularly for those considering fixed rate mortgages.
“While this is a decent sized cut from Aussie, it’s unlikely to move the needle with borrowers, even among the few currently looking to fix, considering the lowest three-year fixed rate on our database is sitting well below at 5.48%,” Tindall said.
“CBA’s half year results out this week confirm borrowers are staying well away from fixed rates at this point in time, with just 3% of new mortgages opting for a fixed rate in the six months through to December 2023.”
RateCity’s weekly wrap-up on lenders’ interest rate movements also showed Abal Bank emerging with the lowest variable rate at 5.75%, while Australian Mutual led the fixed rate segment, offering rates as low as 5.48% for a three-year term.
Significant rate adjustments were noted among some lenders, as shown above, with Bank Australia reducing its owner-occupier principal and interest one-year fixed rate (LVR of less than 90%) by 0.35 percentage points to 6.49%.
The same bank hiked its owner-occupier principal and interest variable rate (LVR of 80% to 90%) by 0.14 percentage points to 6.39%.
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