Earlier this week NAB made widespread cuts across its whole range of fixed mortgage products.
This marks the second time the bank shed several basis points from its fixed rate home loans following the recent plunge in three-year bond yields.
While the economic team of NAB, along with ANZ and Westpac's, doesn't expect any cash rate cut this year, the dovish tilt in the RBA's September meeting minutes has reinforced the possibility for a rate reduction before the year ends.
An outlier from other major bank peers, CommBank predicts the axe will drop in December, starting with a 25 basis point cut followed by another 100 basis point total reduction in 2025, bringing the cash rate down to 3.10%.
"The September Board minutes have removed the line that, 'it was not possible to either rule in or rule out future changes in the cash rate target at this time'," CommBank chief economist Gareth Aird said.
"We view this change as significant. The Board has now back-pedalled from its forward guidance."
The underlying inflation in the third quarter and household consumption falling weaker than the RBA expects will seal the deal for a December rate cut, according to CommBank.
However, NAB prefers to look the other way, or possibly focus on signs that support its forecast that the loosening of the tightening bias will commence in February 2025.
"Some analysts were quick to latch on to the removal of the Board's forward guidance from the August minutes," NAB head of foreign exchange research Ray Atrill said.
"Indeed, we did see a small lift in pricing for a pre-year end first rate cut (13 bps now priced, from 11 bps last Friday).
"We were more inclined to take RBA Deputy Governor Andrew Hauser at his word in his comments during a post (non-monetary policy related) speech when he said he 'rejected a description of the September Minutes as dovish'.
"He stressed the stickiness of inflation was not moving closer to target - in contrast to the US," Mr Atrill added.
Either way, more fixed rate home loans continue to head to the floor.
Though a few lenders made a move in the opposite direction.
ANZ joins in on the rate-cutting action
ANZ has finally awoken from its deep slumber to join fellow Big Four banks in cutting fixed mortgage rates and unveil a sub-6% p.a. offer.
The headline rate of 5.99% p.a. (6.88% p.a.*) is available through the bank's three-year fixed residential home loan with 80% LVR or less.
This came out after a sizable 60 basis point cut was applied to its three-year home loan.
Here are the latest rates available for owner occupiers.
| Product | New rate | Comparison rate |
|---|---|---|
| Fixed 1 yr ≤80% | 6.39% p.a. (-30 bps) | 7.15% p.a. |
| Fixed 2 yrs ≤80% | 5.99% p.a. (-55 bps) | 6.99% p.a. |
| Fixed 3 yrs ≤80% | 5.99% p.a. (-60 bps) | 6.88% p.a. |
| Fixed 4 yrs ≤80% | 6.14% p.a. (-60 bps) | 6.84% p.a. |
| Fixed 5 yrs ≤80% | 6.24% p.a. (-60 bps) | 6.80% p.a. |
| Fixed 1 yr 80-90% | 6.44% p.a. (-30 bps) | 7.34% p.a. |
| Fixed 2 yrs 80-90% | 6.04% p.a. (-55 bps) | 7.16% p.a. |
| Fixed 3 yrs 80-90% | 6.04% p.a. (-60 bps) | 7.04% p.a. |
| Fixed 4 yrs 80-90% | 6.19% p.a. (-60 bps) | 6.98% p.a. |
| Fixed 5 yrs 80-90% | 6.29% p.a. (-60 bps) | 6.93% p.a. |
ANZ made the biggest cut - 70 basis points - on its 4- and 5-year fixed investor home loans.
New investor rates are seen below.
| Product | New rate | Comparison rate |
|---|---|---|
| Fixed 1 yr ≤80% | 6.49% p.a. (-40 bps) | 7.70% p.a. |
| Fixed 2 yrs ≤80% | 6.19% p.a. (-50 bps) | 7.50% p.a. |
| Fixed 3 yrs ≤80% | 6.19% p.a. (-50 bps) | 7.36% p.a. |
| Fixed 4 yrs ≤80% | 6.24% p.a. (-70 bps) | 7.24% p.a. |
| Fixed 5 yrs ≤80% | 6.34% p.a. (-70 bps) | 7.17% p.a. |
| Fixed 1 yr 80-90% | 6.54% p.a. (-40 bps) | 7.88% p.a. |
| Fixed 2 yrs 80-90% | 6.24% p.a. (-50 bps) | 7.67% p.a. |
| Fixed 3 yrs 80-90% | 6.24% p.a. (-50 bps) | 7.51% p.a. |
| Fixed 4 yrs 80-90% | 6.29% p.a. (-70 bps) | 7.38% p.a. |
| Fixed 5 yrs 80-90% | 6.39% p.a. (-70 bps) | 7.30% p.a. |
ANZ’s fixed home loans have no ongoing fees and come with an option for an offset account (available for 1-year terms only) at $10 per month.
Beyond Bank slashes fixed rates, hikes variable investor mortgage
Customer-owned Beyond Bank docked up to 50 basis points from its Total Home Loan products on fixed terms.
This week's reduction was applied across the bank's fixed package mortgage product for both owner occupiers and investors with less than 80% LVR.
The lowest rate for residential home loans is available through Beyond Bank's three-year fixed term at 5.69% p.a. (7.52% p.a.*)
| Product | New rate | Comparison rate |
|---|---|---|
| Total Home Loan Residential Fixed 1 yr | 6.09% p.a. (-10 bps) | 7.95% p.a. |
| Total Home Loan Residential Fixed 2 yrs | 5.79% p.a. (-15 bps) | 7.72% p.a. |
| Total Home Loan Residential Fixed 3 yrs | 5.69% p.a. (-25 bps) | 7.52% p.a. |
| Total Home Loan Residential Fixed 4 yrs | 6.09% p.a. (-50 bps) | 7.50% p.a. |
| Total Home Loan Residential Fixed 5 yrs | 6.09% p.a. (-50 bps) | 7.37% p.a. |
Total Home Loan comes with a low rate Visa credit card (with annual fee waived) and a split loan option.
Meanwhile, Beyond Bank made an increase in one of its variable home loans, the Total Home Loan New Money Offer for investors paying interest only (IO).
Ten basis points were added, bringing the rate to 6.54% p.a. (6.89% p.a.*)
People's Choice moves fixed rates down
People's Choice has made a flurry of cuts across its fixed rate home loans for residents, investors, and first home buyers.
The rate changes apply to its standard and packaged products.
The current lowest rate from the customer-owned lender is 5.39% p.a. (6.26% p.a.*), available for first home buyers with less than 80% LVR fixed for three years.
Meanwhile, here are some of the notable newly adjusted rates of People's Choice Home Loan Package for owner occupiers paying principal and interest (P&I).
| Product | New rate | Comparison rate |
|---|---|---|
| Home Loan Package Owner Occupied Fixed 1 yr | 5.89% p.a. (-25 bps) | 6.44% p.a. |
| Home Loan Package Owner Occupied Fixed 2 yrs | 5.79% p.a. (-20 bps) | 6.40% p.a. |
| Home Loan Package Owner Occupied Fixed 3 yrs | 5.49% p.a. (-20 bps) | 6.29% p.a. |
| Home Loan Package Owner Occupied Fixed 4 yrs | 5.49% p.a. (-50 bps) | 6.24% p.a. |
| Home Loan Package Owner Occupied Fixed 5 yrs | 5.49% p.a. (-50 bps) | 6.20% p.a. |
The Home Loan Package features a split loan option and flexible repayments.
More fixed rate home loan reduction this week
- Heritage Bank lowered residential and investment fixed mortgage rates up to 50 basis points.
- Community First Bank cut 10 basis points from 3-year fixed package home loan.
- Queensland Country Bank varied fixed rate home loans up to 90 basis points.
And another variable rate cut comes through
- Auswide Bank slashed up to 20 basis points from Freedom Package variable home loan with 80% LVR and lower
*comparison rate
Photo by Frans van Heerden
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