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Banks ready themselves for rate cut but RBA expected to hold
Banks are trimming home loan and deposit rates despite the fact the RBA is likely to keep rates on hold tomorrow, signalling there may still be a cut on the cards later in 2020.
Analysis of the RateCity.com.au database shows 16 lenders have cut fixed rate home loans by up to 1.25 per cent since the beginning of the year.
Term deposit rates have also been tumbling, with 26 banks slicing rates since January 1.
Research director Sally Tindall said: “Term deposit cuts, in particular, are often a sign there’s a change to the cash rate coming.”
“However last month’s bump in inflation and employment figures gives the board a reason to hold fire on the next cash rate cut. The RBA will also want time to assess the ramifications of the unfolding bushfire and coronavirus emergencies” she said.
While the cash rate was slashed by 0.75 per cent last year, the average 3-year-fixed rate from the big four banks for owner occupiers paying principal and interest has dropped 0.96 per cent from February 2019 to today.
Meanwhile three-year term deposit rates from the big four banks have dropped by an average of 1.33 per cent since February 2019, Tindall said.
“While mortgage holders are enjoying lower rates and repayments, it’s a different story for savers, whose returns have been plummeting.”
Big four bank owner-occupier fixed home loan rates
2-year fixed
| Feb 19 | Feb 20 | Change | |
| CBA | 3.79% | 2.99% | -0.80% |
| Westpac | 3.79% | 2.88% | -0.91% |
| NAB | 3.69% | 2.88% | -0.81% |
| ANZ | 3.75% | 2.98% | -0.77% |
Source: RateCity.com.au. Rates based on owner-occupier, principal and interest loan of $300K. No LVR restrictions.
3-year fixed
| Feb 19 | Feb 20 | Change | |
| CBA | 3.89% | 2.99% | -0.90% |
| Westpac | 3.79% | 2.88% | -0.91% |
| NAB | 3.99% | 2.98% | -1.01% |
| ANZ | 3.99% | 2.98% | -1.01% |
Source: RateCity.com.au. Rates based on owner-occupier, principal and interest loan of $300K. No LVR restrictions.
5-year fixed
| Feb 19 | Feb 20 | Change | |
| CBA | 4.39% | 3.49% | -0.90% |
| Westpac | 4.19% | 3.39% | -0.80% |
| NAB | 4.24% | 3.19% | -1.05% |
| ANZ | 4.19% | 3.53% | -0.66% |
Source: RateCity.com.au. Rates based on owner-occupier, principal and interest loan of $300K. No LVR restrictions.
Big four bank term deposit rates
1-year
| Feb 19 | Feb 20 | Change | |
| CBA | 2.20% | 1.10% | -1.10% |
| Westpac | 2.30% | 1.20% | -1.10% |
| NAB | 2.40% | 1.20% | -1.20% |
| ANZ | 2.30% | 1.30% | -1.00% |
Source: RateCity.com.au. Based on a term deposit of $20,000.
3-year
| Feb 19 | Feb 20 | Change | |
| CBA | 2.40% | 1.15% | -1.25% |
| Westpac | 2.50% | 1.20% | -1.30% |
| NAB | 2.60% | 1.15% | -1.45% |
| ANZ | 2.50% | 1.20% | -1.30% |
Source: RateCity.com.au. Based on a term deposit of $20,000.
5-year
| Feb 19 | Feb 20 | Change | |
| CBA | 2.65% | 1.15% | -1.50% |
| Westpac | 2.80% | 1.20% | -1.60% |
| NAB | 2.80% | 1.25% | -1.55% |
| ANZ | 2.80% | 1.26% | -1.54% |
Source: RateCity.com.au. Based on a term deposit of $20,000.
Disclaimer
This article is over two years old, last updated on February 3, 2020. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
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