More than a dozen lenders have slashed over 200 fixed rate loans by as much as 0.6 per cent in the past couple of weeks, giving home loan borrowers more discounts to already record-low interest rate deals. Among those that have cut rates are Virgin Money, Australian Unity, AusWide, iMortgage, Bank of Queensland, and National Australia Bank.
HomeLoanExperts.com.au managing director Otto Dargan said that these drops to fixed rate deals are a strong indication that more cuts are on the cards.
"We're seeing some lenders negotiate under the table discounts on fixed rates as well," he said.
According to AMP chief economist Shane Oliver, an August rate cut is almost certain, but it will still depend on the upcoming June quarter inflation figures. He also expects another cash rate cut in November, possibly taking the official rate to a historical low of 1.25 per cent.
"If the inflation comes in on the low side, which we expect, then that will clear the way for an RBA rate cut on August 2," Oliver said. "Our cash rate is at record lows but in a global context compared to Europe, Japan, UK, and the US, our rates are still quite high. Some of the official rates are negative in some countries."
The cash rate in Japan and Europe is zero, while the UK and the US are at 0.5 per cent. Peter Arnold, a spokesman for RateCity, advised owner-occupier borrowers who have 20 per cent or more equity to start hunting for a good deal.
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan