Several Australian lenders have recently adjusted their rates, following the Reserve Bank’s recent rate decision, which slashed 25 basis points from the official cash rate (OCR), bringing it to 4.1%.
Over the past week, four lenders have reduced 24 owner-occupier and investor variable rates by an average of 0.27%. Additionally, Horizon Bank has made cuts to 12 owner-occupier and investor fixed rates, averaging a reduction of 0.18%, Canstar reported.
The current average variable interest rate for owner-occupiers paying principal and interest stands at 6.81%.
Unloan offers the lowest variable rate at 5.74% for any LVR, not counting introductory rates.
Notably, there are now 200 rates below 5.75% listed on Canstar’s database, an increase from 190 the previous week, showcasing a trend towards more competitive pricing in the home loan market.
Australia’s latest cash rate reduction, the first in over four years, was anticipated, yet it brought unexpected developments.
“The big banks fell over themselves to get the good news out the door,” said Sally Tindall (pictured above), data insights director at Canstar. “Less than an hour from the news landing, all four had announced they would be passing on the cut to their variable rate mortgage customers within the next two weeks.”
Prompted by the RBA’s recent rate cut, Mozo’s data showed 35% of Australian borrowers are considering refinancing, with 14% already deciding to proceed.
While 60 lenders have announced adjustments following the RBA decision, only a few, including Athena, Unloan, and Transport Mutual Credit Union, have already implemented these changes.
G&C Mutual has introduced cuts for new customers, with existing customers scheduled to see changes by March 1. This adjustment has positioned Unloan’s rate as the new lowest on Canstar.com.au at 5.74%, with expectations for further reductions as more lenders apply the RBA cut.
Brokers might consider reminding their clients, both homeowners and investors, to check with their lenders about potential decreases in monthly repayments following the recent rate cuts.
“At best, some banks are predicting late March for the start of lower repayments, but this could easily run into April and potentially May,” Tindall said.
