The calm before the rate cut storm? The banks slashing mortgage rates this week

Inflation figures released this week shocked many commentators, coming in below consensus. 

That suggested the Reserve Bank of Australia (RBA) may have successfully tamed the inflationary beast, meaning cash rate cuts could soon emerge.

Indeed, all four big banks now predict the first cut is just weeks away.

The RBA board will meet on 17 February to discuss the cash rate (among other things), with its decision to be announced on 18 February.

If the meeting results in a 25 basis point cash rate cut, it could herald a swathe of variable interest rate cuts.

So, these rate cuts may be a preview of what's to come – unless the RBA decides to hold, that is.

Qudos Bank drops lowest variable rate offering

Qudos Bank has reduced rates on its No Frills home loan product, lowering rates for both owner-occupiers and investors by 10 basis points (bp).

This mortgage represents a low-cost option with no ongoing fees, though it also lacks features such as an offset account.

Here're the new rates on offer:

Borrower/rate type	LVR	New rate	Comp rate*
Owner-occupier P&I	<70%	5.89% (-10bp)	5.89%
	70-80%	5.99% (-10bp)	5.99%
Investor P&I	<70%	6.09% (-10bp)	6.09%
Investor IO		6.34% (-10bp)	6.34%
Investor P&I	70-80%	6.19% (-10bp)	6.19%
Investor IO		6.44% (-10bp)	6.44%

Illawarra Credit Union cuts variable rates by up to 15bp

Illawarra Credit Union has reduced rates across its variable home loans, cutting some by up to 15 basis points.

The changes apply to its Bare Essentials home loan, its The Works Packaged mortgage product, and its Standard variable rate options.

• The Bare Essentials home loan is a fee-free loan that includes a redraw facility.
• The Works Packaged mortgage comes with an offset account and a fee-free credit card, though it has an annual fee of $395.

Check out some of its new rates:

Borrower	Product	New rate	Comp rate*
Owner -occupier	The Works Package	6.04% (-15bp)	6.48%
	Bare Essentials	5.94% (-15bp)	6.04%
Investor	The Works Package	6.34% (-5bp)	6.78%
	Bare Essentials	6.24% (-5bp)	6.34%

MOVE Bank cuts fixed and variable rates by up to 30bp

Finally, former Railways Credit Union, MOVE Bank slashed rates on its Everyday and Offset home loan products.

It now advertises variable rates as low as 5.94% p.a. and fixed rates starting at 5.64% p.a.

Though, there is a catch.

To receive many of its best rates, home loan borrowers must deposit at least $1,500 per month into a MOVE Bank transaction account.

Here are the newly cut variable rates on offer to owner-occupiers:

LVR	Product	New rate	Comp rate*
<80%	Everyday	5.94% (-5bp)	5.99%
	Offset	6.14% (-5bp)	6.19%
80-90%	Everyday	6.09% (-5bp)	6.14%
	Offset	6.29% (-5bp)	6.34%
>90%	Everyday	6.24% (-5bp)	6.29%
	Offset	6.44% (-5bp)	6.49%

Meanwhile, new fixed rates for owner-occupiers are as follows:

Fixed period	Product	New rate	Comp rate*
One year	Everyday	5.84% (-15bp)	5.98%
	Offset	6.11% (-8bp)	6.18%
Two years	Everyday	5.64% (-30bp)	5.93%
	Offset	5.85% (-29bp)	6.13%
Three years	Everyday	5.69% (-15bp)	5.92%
Four years	Everyday	5.84% (-20bp)	5.94%

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