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For the first time in two years, lenders have dropped variable rates to below 5 per cent.
Police Credit Union’s lowest variable rate is now 4.99 per cent, the sharpest on market.
Fixed rates are falling too. Greater Bank and The Mutual Bank have the lowest in market, starting from 4.94 per cent.
Pacific Mortgage Group and Macquarie trail, with rates beginning at 4.99 per cent.
According to Canstar’s data insight director Sally Tindall, variable rates starting in the 4s have not been seen in two years.
With smaller lenders like Police Credit Union leading the charge, lenders still offering rates in the 6s are being pressured to cut.
“Banks are sharpening their pencils to attract new customers. For anyone still sitting on a rate well into the 6’s, it’s a wake up call to get on the phone to your bank,” added Tindall.
However, Tindall said that while lenders are promoting sharp fixed rates, this could be the wrong move for a borrower.
“If you’re thinking about fixing, make sure you understand the trade offs – you might be buying peace of mind, but it could come at a cost if rates fall faster than expected,” she said.
Rate movers this week
This week alone, lenders have begun dropping fixed rates, with some now sitting below 5 per cent.
On 27 July, The Mutual Bank dropped rates by as much as 0.60 per cent. Fixed rates now begin at 4.94 per cent, equal to the lowest on offer in the market.
Macquarie cut its rates by as much as 0.11 per cent on 28 July. The lowest rate on offer is now 4.99 per cent.
RACQ Bank continued the trend and dropped rates on 28 July by as much as 0.25 per cent. Fixed home loans now start at 5.49 per cent.
On 29 July, G&C Mutual Bank cut rates to a minimum of 5.19 per cent. Products dropped by as much as 0.56 per cent.
Reliance Bank also cut rates on 29 July, with its lowest sitting at 5.49 per cent. Rates were cut by as much as 0.56 per cent.
Unity Bank followed suit, cutting rates by as much as 0.56 per cent this week. Its minimum rate now sits at 5.19 per cent.
Summerland Bank brought rates into the 4s too, with its lowest on offer at 4.99 per cent, as of 30 July. Police Credit Union is also offering rates from 4.99 per cent.
