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Going, going gone: The last 4-year fixed rate under 2% disappears

Going, going gone: The last 4-year fixed rate under 2% disappears

Today the last four-year fixed home loan rate under 2 per cent has been hiked, marking an end to ultra-low longer-term fixed rates in Australia.

At the start of the year there were 32 four-year fixed rates under 2 per cent, including from three of the big four banks.

BankVic was the last lender to hold out, however, today this rate is set to rise from 1.95 per cent to 2.29 per cent.

While the vast majority of lenders are hiking 4- and 5-year fixed rates, there is still plenty of heat in the variable and short-term fixed-rate market, with some lenders still trimming their rates in these categories, particularly variable.

Rate changes in the last two months on the RateCity.com.au database (1 April to 1 June 2020):

  • VARIABLE: 31 lenders have cut at least one variable rate, 8 have hiked
  • 2 YR FIXED: 27 lenders have cut, 8 have hiked
  • 3 YR FIXED: 15 lenders have cut, 11 have hiked
  • 4 YR FIXED: 1 lender has cut, 28 have hiked
  • 5YR FIXED: 4 lenders have cut, 25 have hiked

RateCity.com.au analysis shows there are 189 mortgage rates under 2 per cent, an increase of 57 since the start of the year and the highest number on record on the RateCity.com.au database.

Company
Product

Smart Booster Home Loan Discounted Variable - 2yr

Real Time Rating™

3.67

/ 5
Interest Rate

2.60

% p.a

Intro 24 months

Comparison Rate*

2.96

% p.a

Repayment

$1,423

monthly

Real Time Rating™

3.67

/ 5
Go to site
Company
Product

Smart Booster Investor Bundle Discount Variable - 1 Year (Principal and Interest)

Real Time Rating™

2.70

/ 5
Interest Rate

2.74

% p.a

Intro 12 months

Comparison Rate*

3.46

% p.a

Repayment

$1,500

monthly

Real Time Rating™

2.70

/ 5
Go to site
Company
Product

Low Rate Home Loan - Prime (Investment) (Principal and Interest)

Real Time Rating™

3.86

/ 5
Interest Rate

2.79

% p.a

Variable

Comparison Rate*

2.79

% p.a

Repayment

$1,390

monthly

Real Time Rating™

3.86

/ 5
Go to site
Company
Product

Low Rate Home Loan - Prime (Investment) (Interest Only)

Real Time Rating™

2.76

/ 5
Interest Rate

3.19

% p.a

Variable

Comparison Rate*

2.99

% p.a

Repayment

$798

monthly

Real Time Rating™

2.76

/ 5
Go to site

Number of home loan rates under 2 per cent

Pre COVID, 1 March 201-Jan-21Today, 1 June 21Current lowest rate
1 yr fixed02436

*RECORD LOW* 1.67%

2 yr fixed03078

1.78%

3 yr fixed02852

1.79%

4 yr fixed0320

2.04%

5 yr fixed030

2.24%

Variable01523

*RECORD LOW*1.77%

Total0132189

Source: RateCity.com.au. Rates include owner-occupier and investor loans. Some lenders offer multiple rates under 2%.

RateCity.com.au research director, Sally Tindall, said the pack was tightening as some lenders took some record low rates off the table, while others trimmed rates to become more competitive.

“A number of record low rates have been relegated to the history books over the last two months, as lenders took some of the lowest rates off the table,” she said.

“There are now just two rates that are still at record lows – Reduce Home Loan’s variable rate at 1.77 per cent and BCU’s 1-year fixed rate at 1.67 per cent. All the other lowest rates have been hiked.

“We expect more fixed rates will rise after the RBA’s term funding facility wraps up at the end of this month and we edge closer to the next cash rate hike.

“That said, there is still plenty of competition in the market. There are 189 home loan rates under 2 per cent on our database, the highest in our records. Mortgage holders are still spoilt for choice,” she said.

Lowest big four bank owner-occupier home loan rates

CBAWestpacANZNAB 
1 yr fixed

2.09%

1.99%

2.04%

2.09% 

2 yr fixed

1.94%

1.79%

2.04%

1.89%

3 yr fixed

2.19%

1.88%

2.04%

1.98%

4 yr fixed

2.24%

2.19%

2.24%

2.19%

5 yr fixed

2.99%

2.49%

2.24%

2.49%

Variable

2.69%

2.19% for 2 yrs then 2.69%

2.72%

2.69%

Source: RateCity.com.au. Note: Westpac's rates are for a loan to value ratio of up to 70%.

Lowest rates on RateCity.com.au database

LenderRate
1 yr fixedBCU

1.67%

2 yr fixedBCU

1.78%

3 yr fixedCredit Union SA

1.79%

4 yr fixedHume Bank

2.04%

5 yr fixedANZ/ UBank

2.24%

VariableReduce Home Loans

1.77%


RateCity.com.au. Rates are for owner occupiers paying principal and interest. Some LVR requirements apply.

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This article was reviewed by Head of Content Leigh Stark before it was published as part of RateCity's Fact Check process.

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