Fixed mortgage rates on the chopping block



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Challenger banks are joining market leaders in slashing their fixed mortgage rates to attract new customers.

IMB Bank, Greater Bank and CUA have all recently cut fixed rates by as many as 75 basis points.

IMB Bank cut 1-year fixed rates on its Fixed Rate Investment Loans by 40 basis points for both principal and interest and interest-only borrowers, while interest-only borrowers saw 3 and 5-year fixed rates cut by 20 basis points.

At the same time, IMB Bank cut the variable rate on its Budget Investment Loan by 10 basis points for both principal and interest and interest-only borrowers.

Lowest mortgage rates from IMB Bank’s cuts

Loan New interest rate New comparison rate Old interest rate Old comparison rate Change Monthly repayment*
IMB Bank Budget Investment Loan (Principal and Interest) 3.99% 4.05 4.09 4.15% -0.1 $1669
IMB Bank Fixed Rate Investment Loan (Interest Only) (NSW and ACT only) 3 Years 3.99% 4.97% 4.19% 5.08% -0.2 $1669

Greater Bank cut fixed rates on several options for its Great Rate Home Loan and Ultimate Home Loan products, by between 5 and 15 basis points.

LOWEST MORTGAGE RATES FROM Greater Bank’s CUTS

Loan New interest rate New comparison rate Old interest rate Old comparison rate Change Monthly repayment*
Greater Bank Great Rate Fixed Home Loan (New Customers) (NSW, ACT & QLD only) 2 Years 3.59% 4.31% 3.69% 4.32% -0.1 $1589
Greater Bank Great Rate Fixed Home Loan (New Customers) (NSW, ACT & QLD only) 3 Years 3.59% 4.24% 3.74% 4.27% -0.15 $1589
Greater Bank Ultimate Fixed Home Loan (New Customers) (NSW, ACT & QLD only) 2 Years 3.59% 4.53% 3.69% 4.55% -0.1 $1589
Greater Bank Ultimate Fixed Home Loan (New Customers) (NSW, ACT & QLD only) 3 Years 3.59% 4.48% 3.74% 4.52% -0.15 $1589

CUA also slashed interest rates on its Fixed Rate and Premium Fixed Rate home loan products, with options for owner occupiers and investors paying principal and interest or interest only. The cuts ranged from 6 to 75 basis points, with the biggest cut and the lowest rate going to CUA’s 2-year interest-only investment loan:

Loan New interest rate New comparison rate Old interest rate Old comparison rate Change Monthly repayment*
CUA Fixed Rate Investment Loan (Interest Only) 2 Years 3.54% 5.48% 4.29% 5.56% -0.75 $1579

These fixed rate cuts follow similar cuts from Australia’s big four banks in recent months, with ANZ being the big bank that most recently  cut its fixed rates by as many as 60 basis points.

Other major banks that have cut fixed interest rates this week include Bankwest, ME and UBank

*All calculations assume a $350,000 loan paid monthly over a 30 year term. Repayment may change when fixed rate ends and reverts to variable rate. Source: MoneySmart

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