Mortgage lenders are anticipating the looming Reserve Bank of Australia meeting by slashing home loan rates to a level not recorded in two years.
The Police Credit Union last week dropped its lowest variable rate to just 4.99 per cent for owner-occupiers with at least a 20 per cent deposit.
The last time variable rates started with a 4 was in 2023, figures by Canstar show.
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During the past fortnight, 13 lenders have cut at least one fixed home loan rate.
This includes Australia’s fifth-largest bank, Macquarie, which sliced its rates by up to 0.20 percentage points late last week.
A total of 17 lenders now offer at least one fixed rate under 5 per cent, including Macquarie, Greater Bank, Bank of Queensland, Heritage Bank and Australian Mutual Bank.
The lowest variable rate is now a fraction above the lowest fixed rates, despite the chance of further cuts when the RBA holds its policy meeting on August 12.
“Variable home loan rates starting with a ‘4’ are finally back on the table after a two-year hiatus,” said Canstar insights director Sally Tindall.
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She says banks are dangling attractive fixed rates offering in front of customers seeking short term certainty, but urged them to weigh choices carefully.
“If you’re thinking about fixing, make sure you understand the trade‑offs – you might be buying peace of mind, but it could come at a cost if rates fall faster than expected.”
Hopes of a further interest rate cut were boosted today with the release of new inflation figures from the Australian Bureau of Statistics, showing headline inflation slowing to 2.1 per cent in the 12 months to the June quarter – down from 2.4 per cent in March.
It means headline inflation is now at the bottom of the RBA’s target range.
Economists and commentators believe the new data will pave the way for the central bank to cut rates by 25 basis points at its August meeting, to 3.60 per cent.
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