Fixed mortgage rates continue to be cut with Macquarie Bank, ME, and HomeStart Finance being the latest lenders to cut rates by up to 60 basis points, according to TheAdviser’s report.
Investment banking company Macquarie has revealed that starting 1 April 2019, they will be reducing fixed rates for all their owner-occupied and investment mortgage products by as much as 60 basis points.
The new adjustments include a new rate of 3.69 per cent for owner- occupier three-year fixed P&I loans with an LVR of 70 per cent or less, which is a decrease of 19 basis points. In addition, the new rate of 3.89 per cent will apply to investor three-year fixed rate P&I loans with the same LVR range, a decrease of 30 basis points.
Macquarie also announced its biggest drop of 60 basis points for five-year fixed rates in regards to investor P&I loans with an LVR of 80 per cent or less, which now start from 4.09 per cent.
ME Bank, also known as ME, has likewise publicised their fixed rate changes for member and non-member packages effective 29 March 2019. ME has decreased one to five-year fixed mortgage rates by up to 50 basis points.
In addition, they will reduce their two and three-year fixed home loans for its member package (for owner-occupiers paying principal and interest) by 10 and 20 basis points to 3.74 per cent and 3.79 per cent, respectively.
Furthermore, ME reduced its five-year fixed home loan with a member package (for owner-occupiers paying principal and interest) by 50 bps to 3.99 per cent.
South Australian-based loan provider HomeStart Finance, on the other hand, has revealed two-year fixed rate mortgage cuts of as much as 15 basis points, effective 1 April 2019. Also, home loans with a two-year fixed rate have been reduced from 5.24 per cent to 5.09 per cent. Additionally, HomeStart Graduate Loans with a two-year fixed rate have decreased from 5.24 per cent to 5.09 per cent. Further, HomeStart Low Deposit Loans with a two-year fixed rate on the first year will decrease from 6.24 per cent to 6.09 per cent, then the second year from 5.24 per cent to 5.09 per cent.
Other banks cutting fixed mortgage rates
Aside from Macquarie, ME, and HomeStart, Suncorp has also recently announced cutting rates by as much as 70 basis points.
Opposing a trend of out-of-cycle variable mortgage rate hikes from several lenders, Teachers Mutual Bank and Adelaide Bank have likewise cut their fixed mortgage rates by up to 92 basis points since the turn of the year.
Other banks and lending institutions such as AMP, MyState, NAB and its subsidiary, UBank, the Bank of Queensland, Virgin Money, and ING have announced rate increases since the start of the year due to funding cost pressures.
Managing Director of Finance Brokers Association of Australia, Peter White, has alleged a number of banks for charging clients for the banks’ “shortfalls”, suggesting the current drop in wholesale funding costs.
According to Mr White, “Smaller banks are already cutting rates and some economists are predicting two official rate cuts this year, with the Reserve Bank moving to a neutral bias amid concerns about the slowing global economy and the declining housing market.
“The first official rate cuts of 2019 may be here soon, but going by history, I suspect the banks will protect their massive profit margins by refusing to pass on any cuts in full.”
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