Fixed rate mortgages have been steadily falling over the past few months on the back of lower bond yields and swap rates making funding cheaper for lenders.

Major mortgage lenders CommBank, Macquarie, and Westpac and its subsidiaries have all dropped their fixed rates in recent weeks.

However, borrowers remain averse to jumping on the fixed rate mortgage train, as the share of new home loans (including refinances) on fixed terms has further declined to 1.95%.

With most fixed home loans still well above the 6% mark (except for a few), borrowers seeking lower rates continue to veer towards variable mortgages, where the lowest variable rate for owner occupiers sits at 5.89% p.a., according to the InfoChoice database.

But if you opt to fix your mortgage for three years, you may be able to secure rates lower than that.

Just how long those rates remain attractive is anyone's guess, with the RBA all but ruling out rate cuts in 2024.

Bank of Queensland drops fixed rates anew

Bank of Queensland (BOQ) has returned this week to further slash the rates on mortgages fixed for between two and five years.

Owner occupiers can access the lowest discounted rate of 5.69% p.a. (6.31% p.a. comparison rate*) if they fix for three years with at least 10% deposit and pay both principal and interest (P&I).

The best rate for investors is also available through the three-year term, at 5.79% p.a. for P&I loans with a maximum loan-to-value ratio (LVR) of 90%.

However, note that for mortgages with an LVR over 80% (deposit is less than 20%), borrowers are required to pay lenders mortgage insurance (LMI).

BOQ's discount rates - which are 0.35% below its standard rates - are only available to new customers.

Here are the newly adjusted discount rates for the bank's fixed OO home loans:

For investors paying P&I:

loans.com.au lowers 3-year fixed home loan

Online non-bank lender loans.com.au has dropped the axe on its fixed owner occupier mortgage on three-year terms.

A hefty 55 basis point cut has brought its rate to 5.69% p.a. (6.16% p.a. comparison rate*), becoming the non-bank lender's current top rate across all home loan products.

The loans.com.au special fixed rate comes with a 90-day rate lock feature (optional for a fee) and an option to split the loan with a variable rate.

In the interest of full disclosure both loans.com.au and InfoChoice are associates of the Firstmac Group.

Credit Union SA cuts fixed rates on low deposit loans

Credit Union SA has joined the wave of rate cuts, dropping the rates on fixed home loans by up to 25 basis points.

The changes affect its range of residential and investment mortgages, including low deposit loans fixed for two and three years

Borrowers with as little as 3% deposit can secure 5.89% p.a. interest rate (6.65% p.a. comparison rate*) if they fix with Credit Union SA for three years.

For loans with an LVR exceeding 80%, LMI will be added to the total loan amount.

Low deposit fixed investor loans on three-year terms carry a 6.14% p.a. rate (6.89% p.a. comparison rate*), plus LMI.

The abovementioned rates are available through Credit Union SA's Fixed Home Loan Package, which comes with rate discounts on home loans and other banking products for an annual fee of $395.

For standard low-deposit home loans paying P&I, here are some of the new rates available:

The South Australian credit union likewise adjusted the rates offered for borrowers who prefer interest-only (IO) repayments.

Other fixed rate movements this week:

Queensland Country Bank has reduced its three-year fixed rates by 10 basis points, while simultaneously increasing fixed investment loans up to 20 basis points.

Read more: Bank of Queensland (BOQ) Home loan rate changes Home Loans News

Bernadette Lunas

Finance Journalist

Bernadette is a journalist with years of experience covering topics in macroeconomics, real estate, and lifestyle beats for notable print media organisations. She joined the InfoChoice Group in 2024, bringing her passion for writing stories that help Australians make better decisions about money.

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