Home loan rates have continued to plummet ahead of tomorrow’s RBA cash rate meeting, with a new “record low” variable rate of 2.29% now on offer.
Since the first of April, more than 50 lenders have cut at least one variable rate for new customers and nearly 60 lenders have cut at least one of their fixed rates, with the lowest on the market resting at 2.09%.
According to RateCity.com.au, Homestar Finance dropping the rate on its Star Gold Home Loan to just 2.29% has made it the lowest advertised variable rate on the market.
While that rate has limitations as it’s exclusively offered to refinancers in metro areas who have paid down at least 40% of their loan, the breadth of the rate movements evidenced across the market indicates there’s “still plenty of fire” in the market even with the challenges introduced through the COVID-19 pandemic, accoriding to RateCity research director Sally Tindall.
“The cash rate might have settled in at 0.25%, but competition between the lenders has continued to put downward pressure on home loan rates,” she said.
“We’ve already seen fixed rates hit record lows of just 2.09%, while the lowest variable rate is now 2.29%.
“This will put pressure on other lenders to shave their lowest variable rates. This kind of competition is great for homeowners in a position to refinance, because lenders are willing to do battle for their business.”
Tindall's point was underscored by APRA’s monthly banking statistics released last week which showed that non-majors such as Macquarie and HSBC are continuing to grow their loan books. Year on year, Macquarie increased its home loan book by 31%.
“That’s a significant feat in what has been a challenging home lending market,” said Tindall.