Lenders adjusting mortgage rates



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As speculation builds that a cut to Australia’s cash rate could be arriving in the near future, several of Australia’s lenders have been adjusting their home loan interest rates over the past week.

Beyond Bank has slashed fixed rates across a range of mortgage products, including its Total Home Loan Packages and Pinnacle Plus Packages.

Fixed rates were slashed as low as 3.79% p.a. (comparison rate 4.88% p.a.) for Beyond Bank’s Total Home Loan Package 3-year special, though the most substantial cuts were for its Total Home Loan Package investment loans, which fell 20 basis points to as low as 4.19% p.a. for selected loans (comparison rates: 5.34% p.a. for 1-year fixed, 5.26% for 2-year fixed, and a 5.19% p.a. for 3-year fixed).

Loan New interest rate New comparison rate Old interest rate Old comparison rate Change Monthly repayment*
Beyond Bank Australia Total Home Loan Package Home Loan Fixed Special 3 Years 3.79% 4.88% 3.83% 4.45% -0.04 $1629
Beyond Bank Total Home Loan Package Investment Loan Fixed 1 Year 4.19% 5.34% 4.39% 4.87% -0.20 $1710
Beyond Bank Total Home Loan Package Investment Loan Fixed 2 Years 4.19% 5.26% 4.39% 4.86% -0.20 $1710
Beyond Bank Total Home Loan Package Investment Loan Fixed 3 Years 4.19% 5.19% 4.39% 4.86% -0.20 $1710

QBANK also cut fixed rates on a selection of its home loans for owner occupiers and investors, going as low as 3.62% p.a. (comparison rate 4.32% p.a.) for its 3-year Fixed Rate Home Loan Special after a fall of 13 basis points.

The deepest rate cuts from QBANK were for its 4 and 5 year Fixed Rate Home Loans, whose fixed rates fell by 35 basis points to 4.24% (comparison rate 4.46% for 4 year fixed, and 4.43% for 5-year fixed).

Loan New interest rate New comparison rate Old interest rate Old comparison rate Change Monthly repayment*
QBANK Fixed Rate Home Loan Special (QLD only) (New Customer) 3 Years (LVR < 95%) 3.62% 4.32% 3.75% 4.36% -0.13% $1595
QBANK Fixed Rate Home Loan 4 Years (QLD only) 4.24% 4.46% 4.59% 4.59% -0.35 $1720
QBANK Fixed Rate Home Loan 5 Years (QLD only) 4.24% 4.43% 4.59% 4.59% -0.35 $1720

But not all lenders have been cutting rates – IMB Bank has recently raised variable interest rates on selected principal & interest and interest-only mortgage offers by 10 basis points, going as high as 6.39% (comparison rate 6.28%) for an interest-only Standard Variable Investment Loan.

IMB Bank also cut its fixed interest rates by as many as 85 basis points, going as low as 3.59% per annum for 1, 2 and 3 year fixed principal and interest loans (comparison rates: 4.72% for 1-year fixed, 4.62% for 2-year fixed, and 4.53% for 3-year fixed). 

If the Reserve Bank of Australia (RBA) decides to cut the nation’s official cash rate at its next meeting in June 2019, certain lenders could end up dropping their mortgage rates to 3.20% or even lower.

*Assumes a $350,000 home loan paid monthly over a 30 year term. Repayments for fixed-rate loans will change when their fixed rate terms end and revert to the lender’s variable rate. Source: MoneySmart

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