Which lenders cut fixed rates despite the RBA decision?

by Calida Smylie12 May 2014
Lenders are still cutting rates this month left, right and centre in a bid to capture more of the tight market.
On Thursday, Australian First Mortgage will reduce the three-year fixed rate on its Flexible Option product range, for both full and lo doc.
The full doc product moves a full ten basis points, from 5.19% to 5.09%, and the lo doc reduces from 6.29% to 6.19%.
From today, AFM is also dropping the two-year fixed rate on its Complete/Alliance product range and will be offering rates from 4.78%.
The RBA decided to keep interest rates on hold for this month, but AFM managing director Tanya White said the fixed rate review is part of AFM’s normal pricing activity.
AFM is always looking for opportunities to review its interest rates outside of the RBA’s cash rate movements.
“So in spite of the RBA keeping the cash rate stable this month we have reduced our three-year fixed rates in our Flexible Option product range.”

On Friday, Wide Bay Australia introduced new two-year fixed home loan interest rates. The ‘broker only’ rate of 4.75% replaces its previous three year broker only rate of 4.89%.

P&N Bank has cut its two-year rate from 4.75 per cent to 4.69 per cent – the second time in less than a month – after cutting nine basis points around three weeks ago. The lender also cut its three-year fixed rate from 4.99% to 4.85%.
Other lenders which made cuts over the past month include AMP Bank, Bankwest, Citibank, Commonwealth Bank, CUA, Homeloans, P&N Bank, Pepper and Yellow Brick Road.
And another lender is responding to broker demand by extending its $0 application fee special. Bluestone introduced a $0 application fee plus one free valuation across all its loan products in January.

The temporary offer, which applies to all new loan applications, has now been extended until June 30.


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  • by MCC 12/05/2014 9:31:18 AM

    Not only a response to competitive market but more to do with uncertain medium term economic outlook for 'growth' - factors include:-
    - dollar still above 90c US
    - current mining peak over & economy transitioning.
    - public sector spending cuts combined with increased taxes
    - 'under employment' double digit (forget about measuring unemployment)

  • by Patrick 12/05/2014 2:55:52 PM

    Fixed rates are not determined by the RBA, just the cash rate. Fixed rates are determined by Swap Rates set by the money market. There may have been some small expectation of a cash rate rise priced into swap rates and when no change was announced the market corrected and this has been passed on by some lenders, but this is nothing to do with RBA.

    PS MCC, only the mining investment boom is over, the production from increased capacity boom is just beginning. Look at the volume of exports, particularly iron ore. We now have a significant trade surplus and might be heading for a current account surplus. National savings (superannuation) A$1.7 trillion and expected to reach $7 trillion by 2033, so plenty of local capital available. These trends will put upward pressure on A$ and downward pressure on interest rates. RBA policy is still stimulatory, but neutral will now be a cash rate of 4.0% not 5.0% so when rates rise it will not be too bad unless rampant inflation breaks out.