As of 17 June, the lowest variable rate currently on offer within Australia has dropped to a record 2.19%.
Reduce Home Loans yesterday introduced the market-leading rate, down 0.20% from its previous resting point of 2.39%.
The special is for owner-occupier variable customers with loans up to $850,000 and is available for loans approved by 31 July.
At the time of publishing, the average variable interest rate for owner occupiers paying principal and interest rests at 3.47%, while the average 3-year fixed rate for the same group of borrowers is 2.64%.
At the end of March, only 19 lenders offered at least one fixed or variable rate of 2.5% or below; now, almost three months later and with no additional cuts to the cash rate, that list has swelled to 77 lenders, according to analysis from RateCity.com.au.
The comparison site’s research director Sally Tindall attributed the movement to lenders’ desperation to attract new customers.
“Since the emergency RBA rate cut in March, we’ve seen the number of lenders offering rates of 2.5% or less quadruple,” she said.
“The latest ABS statistics show while the number of new home loans has started to fall, refinancing is on the rise, putting pressure on the banks to remain competitive.
“We expect this rate war to intensify, despite the fact mortgage rates are already at record lows.”
However, Tindall emphasised that “the catch” is the record low rates are largely reserved for new customers or homeowners willing to fix their rate.
“[Regardless], Australians are increasingly starting to realise they have to act on their mortgage if they want to get a save money,” she concluded.