Mortgage rates slide down in anticipation of earlier-than-expected RBA cut

Bank of Queensland (BOQ) and Bank of China demonstrated their confidence that an easing cycle is on the horizon as they led the cutting action this week. 

Though the latest ABS labour force survey – which showed the unemployment rate at 4.1% – raised the likelihood of an earlier rate cut, economists believe the softness of the January jobs data won’t be enough to draw any firm conclusions.

“January labour market data came in weaker than expected, but there were some atypical movements and seasonality appears to be changing,” ANZ senior economist Blair Chapman said.

“This may mean the RBA won’t put too much weight on this release and looks to future releases for more accurate gauges on underlying labour market momentum.”

Although home loan rates continue to trend lower, a few lenders moved the variable rates on their select mortgage products upwards this week as the market awaits more data that will steer the decision of the RBA Board, which, in its latest post-meeting statement, refrained from explicitly ruling out further rate increases. 

Here are the latest movements in home loan rates for the week ending 16 February. 

BOQ slashes home loan rates 

Bank of Queensland, which commands a 3% market share of home loans, dropped the rates offered to customers by as much as 103 basis points. 

The cuts were applied to the bank’s fixed and variable rate products.

Amid widespread cuts, the bank hiked two of its products for owner-occupiers on variable rates. 

The Economy Variable, paying principal and interest (P&I) with a loan-to-value-ratio (LVR) of <70% was up 9 basis points to 6.18% p.a. (6.33% p.a. comparison rate*). 

Meanwhile, the new rate for the same product with 70-80% LVR is now 6.23% p.a. (6.38% p.a. comparison rate*) after it dropped 9 bps this week.

Bank of China wields the axe on fixed rates

The international bank slashed the fixed rates on its various investor and owner-occupier home loan products by up to 50 basis points. 

Bank Australia moves home loan rates down, hikes a few

Bank Australia joined other home lenders in slashing variable and fixed interest rates this week. 

The customer-owned bank put a wide range of its investor and owner-occupier home loan products on the chopping block, decreasing rates by as much as 35 basis points. 

Meanwhile, the bank hiked the rates on its Premium Package with ≤90% LVR by 10 bps to 6.50% p.a. (6.82% p.a. comparison rate*) and Basic Home Loan (LVR ≤90%) by 14 bps to 6.39% p.a. (6.44% p.a. comparison rate*).

MyState Bank drops variable and fixed interest rates

Tasmania’s local bank MyState Bank lowered interest rates across a range of its investor and owner-occupier home loan products. 

Ten basis points were cut from its Investment Fixed product with an LVR of 80-90%, leaving its interest rate at 6.49% p.a. (7.87% p.a. comparison rate*), and Residential Fixed with an LVR of 80-90%, bringing it down to 6.14% p.a. (7.77% p.a. comparison rate*).  

Meanwhile, a more modest five basis points were slashed off its Basic Variable Home Loan with an LVR of 80-90%, leaving the interest rate at 6.48% p.a. (6.51% p.a. comparison rate*), and Investment Basic Variable Home paying interest only with an LVR of 80-90%, whose interest rate is now 6.94% p.a. (6.99% p.a. comparison rate*). 

Other movers this week:

• Queensland Country Bank slashed 20 basis points off its variable home loans paying principal and interest and interest only.
• The Mutual Bank dropped the variable interest rate on its Investment Special home loan product by 20 basis points.

Read more: Home Loans News Home Loan Basics Home loan rate changes Product 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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