Following on from Macquarie Bank last week, and NAB in July, on Wednesday Westpac cut fixed rates by up to 80 basis points on a gamut of products.
There is not too much difference in rates among the major banks.
Most notable were Premier Advantage packaged rates fixed for between 2 and 5 years, paying P&I for owner occupiers, now all with advertised rates below 6% p.a. The exact details are below:
- 2 Years: 60 basis point cut to 5.89% p.a. (7.45% p.a. comparison rate*)
- 3 Years: 70 basis point cut to 5.89% p.a. (7.32% p.a. comparison rate*)
- 4 Years: 70 basis point cut to 5.89% p.a. (7.19% p.a. comparison rate*)
- 5 Years: 80 basis point cut to 5.89% p.a. (7.09% p.a. comparison rate*)
This is for LVRs of up to 70%. For 80% LVR, advertised rates tend to increase by 10 basis points.
Sadly for investors, the lowest rates on fixed terms from the major bank are still a touch above the 6% mark.
This is a strong signal from the bank that rates are likely not going to be persistently high for much longer, despite its economic team forecasting an RBA rate cut until February 2025.
Bond yields might have something to do with it, which bear a heavy weight on fixed-rate home loan movement;
For example, Australian Treasury yields for 5-year notes are down by 45 basis points over the past month to 3.57%.
This implies the prices are going up as investors chase stability in a time of share market instability and uncertainty around economic forecasts.
Photo by Kiwiteen123 on Wikimedia Commons
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