This week's rate movements pose an interesting insight on the discourse from the banks.
Fixed-rate loans are generally on the way up, with a few exceptions, while there have been some variable rate cuts.
What this suggests is that banks ultimately expect a 'higher for longer' RBA cash rate, with one more hike potentially on the cards for August.
A lot hinges on the latest batch of inflation figures, due Wednesday 31 July.
Analysts expect the case for an RBA rate hike will be strong if the quarterly inflation figure is 1 to 1.1%.
This expectation has a flow-on effect to home loan rate setting; entice the borrowers in with a slight variable rate cut, then potentially whack them with rises as they come through.
The rate rises are baked in with fixed rates, and if you're trying to 'time the market', you're playing a losing game to the banks - however the stability could be worth it for some.
These rates pertain to new customers, likely not existing ones.
ubank tinkers with 'Flex' loans
NAB-owned digital outfit ubank reduced rates on a few 'Flex' loans by 5 to 10 basis points. Interestingly, the only changes for owner occupiers were for interest-only loans.
Below are some changes for investors paying principal & interest, all reduced by 10 basis points:
- <60% LVR: Now 6.29% p.a. (6.53% p.a. comparison rate*)
- <70% LVR: Now 6.34% p.a. (6.58% p.a. comparison rate*)
- <80% LVR: Now 6.34% p.a. (6.58% p.a. comparison rate*)
Those last two rates are interesting, with basically no incentive to develop a big deposit - a market-wide phenomenon we noticed back in January.
The bank's 'Flex' loans come with a 100% offset account, attracting a $250 annual fee with the ability to make any changes across up to five Flex split loans.
Credit Union SA reduces packaged rates
The small SA-based institution reduced rates by 10 basis points on a couple of packaged products for owner occupiers paying P&I.
- <60% LVR: Now 6.04% p.a. (6.41% p.a. comparison rate*)
- <80% LVR: Now 6.09% p.a. (6.46% p.a. comparison rate*)
Again, just a five basis point incentive to develop a bigger deposit or refinance with a large amount of equity.
Note that these are listed as special offers and could expire at any time.
The credit union's packaged loans waive application, settlement, and top up fees, in exchange for an annual fee of $395.
Borrowers can also see their credit card annual fee waived, save 50 basis points on standard personal loan rates, and earn an extra 25 basis points on term deposit balances up to $250,000.
HSBC varies a large swathe of rates
HSBC made a wide array of moves on both variable and fixed rates - mostly up, but some down. The only variable downers included the Home Value IO 80% product.
It was cut by 5 basis points down to 6.54% p.a. (6.26% p.a. comparison rate*).
Upwards of 20 other individual products were varied by the UK-owned behemoth this week.
Other moves
Perhaps the headline of the week was NAB reducing fixed-rate loans by up to 60 basis points, with a host now below the 6% p.a. threshold, and now well ahead of its big four bank compatriots.
Other moves included:
- Horizon Bank: Varied fixed rates by up to 10bps
While not a rate increase, Teachers Mutual Bank and subsidiaries also upped their discharge fees to $250 from $210 and consequently some comparison rates increased by 1 basis point.
Photo by schantalao on Freepik
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