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Bank of Queensland (BOQ) now has the lowest fixed rate for a two-year term, starting at 4.89 per cent for owner-occupiers with a 20 per cent deposit.
The latest announcement comes off the back of continued rate movements from lenders. Many have begun to drop rates as the industry prepares for the next RBA monetary policy meeting tomorrow (12 August).
According to Canstar, the lowest rates for each term are:
- One-year: Pacific Mortgage Group and Bank of China from 4.99 per cent
- Two-year: BOQ from 4.89 per cent
- Three-year: Greater Bank and The Mutual from 4.94 per cent
- Four-year: Macquarie, People’s Choice, and BOQ from 5.29 per cent
- Five-year: Macquarie, People’s Choice, BOQ, and Heritage Bank from 5.29 per cent
- Variable: Police Credit Union from 4.99 per cent
Fixed rates are now firmly within the 4s. Canstar’s data insights director Sally Tindall described the BOQ announcement as a “power move”.
She expects competition to continue as lenders vie for the title of lowest in market.
“The question is, which bank will be next to trump them, in a bidding war that’s slowly but surely pushing fixed rates south,” said Tindall.
According to Canstar, there are now 18 lenders with rates under 5 per cent.
Cash rate call to shake things up
If the RBA opts to cut rates at tomorrow’s meeting, there will be an influx of lenders pushing rates in the 4s.
Tindall said that no borrower should be on a rate that’s over 5.50 per cent if the central bank cuts rates.
“In fact, if the majority of banks pass the cut on in full, which they should absolutely do, then there should be over 30 lenders offering at least one variable rate under 5.25 per cent, while CBA and Westpac’s lowest rates could hit 5.34 per cent,” she said.
However, with ANZ recently increasing its rates, it can be hard to predict changes.
This was described as an “unusual” move from the major bank, especially this close to an RBA meeting.
CEO and founder of Stryd, Ruth Hatherley, said the monetary policy meeting will bring rates into sharp focus as borrowers chase a low headline rate.
She believes there will be both opportunity and volatility going forward as lenders “jockey for position” and test rate offers.
“We’re not far off ‘4-something’ being the new normal, but I’m not sure it’s going to happen in August,” added Hatherley.
[Related: Interest rates dip below 5%, as competition heats up]
