Australian banks slashed some of their fixed rate home loans in response to the recent fall in long-term money market rates.
ANZ cut its three-year fixed rate by 0.06% to 7.64% and its four-year fixed term loan by 0.19% to 7.74%. ANZ also reduced its five-year fixed rate by 0.09% to 7.94%. However, the bank raised its one-year fixed term by 0.13% to 6.84% to reflect the current rigidity in short-term funding.
St.George cut its two-year fixed mortgage rate by 0.4% to 7.14% pa, while Westpac lowered the interest rate on its three-year fixed term by 0.2% to 7.39%.
AMP also cut rates on a number of mortgages, including its three and five-year fixed term loans. AMP’s three and five-year fixed rate loans were also reduced by 0.3% to 7.59% and 8.09% respectively.
These rate shifts were foreshadowed in our newsletter last week, when Harry Senlitonga, Datamonitor’s senior analyst, said that the uncertainties in global markets have added downward pressure to interest rates, particularly on long-term market rates.
“The recent fall in long-term money market rates will affect pricing for many fixed rate products, such as term deposits and fixed rate mortgages. We should expect both term deposit rates and fixed rate mortgages to drop as a reaction to the recent change on market expectation for Reserve Bank of Australia cash rate movements,” said Senlitonga.
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