Number of lenders with a home loan under 5pc. Source: Canstar.
Eighteen Australian lenders have slashed interest rates below 5 per cent ahead of the Reserve Bank’s expected big move on Tuesday.
Comparison firm Canstar’s database to August 8 showed 18 lenders had at least one fixed rate sitting under 5 per cent now, and one also had a variable rate at that level – Police Credit Union.
The list below is based on personal home loans for any loan amount, any LVR, and both principal & interest and interest only payments, and excludes introductory, green only and first home buyer only home loans.
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Lenders with lowest fixed rates under 5 per cent:
| Rank | Lender | Lowest advertised rate | Term |
| 1 | BOQ | 4.89% | 2 years |
| 2 | Greater Bank | 4.94% | 3 years |
| 3 | The Mutual Bank | 4.94% | 3 years |
| 4 | Easy Street Fin Services | 4.95% | 2 years |
| 5 | Regional Australia Bank | 4.98% | 2 years |
| 6 | BankVic | 4.98% | 3 years |
| 7 | Pacific Mortgage Group | 4.99% | 2 years |
| 8 | Hume Group | 4.99% | 3 years |
| 9 | Macquarie Group | 4.99% | 2 years |
| 10 | Police Bank | 4.99% | 3 years |
| Rank | Lender | Lowest advertised rate | Term |
| 11 | GMCU | 4.99% | 2 years |
| 12 | Australian Mutual Bank | 4.99% | 3 years |
| 13 | Community First Bank | 4.99% | 3 years |
| 14 | Queensland Country Bank | 4.99% | 3 years |
| 15 | ME Bank | 4.99% | 2 years |
| 16 | Police Credit Union | 4.99% | 3 years |
| 17 | Summerland Bank | 4.99% | 2 years |
| 18 | Bank of China | 4.99% | 1 year |
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SOURCE: Canstar.com.au |
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Canstar data insights director Sally Tindall said Bank Australia is currently offering a lowest fixed rate of 4.59 per cent for 3 years, but it was strictly for new builds with a NatHERS 7.5 star rating or higher, all electric and rooftop solar, and the home must have been built within the last 18 months.
“The question is, which bank will be next to trump them, in a bidding war that’s slowly but surely pushing fixed rates south,” Mr Tindall said. “Fixed rates starting with a ‘4’ are now a firm fixture in the lowest rate tables with 18 lenders now in the under 5 per cent club.”
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RBA Governor Michele Bullock is under pressure to deliver a rate cut on Tuesday with the board. Picture: NewsWire/ Gaye Gerard
Canstar data insights director Sally Tindall. Picture: Tim Hunter.
She said if the Reserve Bank puts in a 0.25pp cut Tuesday, “owner-occupiers paying down their debt should not be on a rate that’s over 5.50 per cent”.
“In fact, if the majority of banks pass the cut on in full, which they should absolutely do, then there should be over 30 lenders offering at least one variable rate under 5.25 per cent, while CBA and Westpac’s lowest rates could hit 5.34 per cent.”
If the RBA cuts the cash rate to 3.60 per cent on Tuesday, an owner-occupier with a $600,000 debt today, and 25 years remaining on their loan, could see their monthly repayments drop by $90, assuming the banks pass it on in full to existing variable rate borrowers, Ms Tindall said.
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Potential impact of an August RBA cash rate cut. Source: Canstar.
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