Macquarie, Up cut home loan rates

Macquarie Bank was among the home loan rate cutters this week - and that was before the latest inflation data was released on Wednesday.

The all-important quarterly Consumer Price Index figures for June showed inflation has slowed to an annual rate of 2.1%, down from 2.4%.

At the same time, underlying inflation, the Reserve Bank of Australia's preferred measure, dropped to 2.7% over the past 12 months, down from 2.9%.

It meant a cash rate cut on 12 August was "almost certain" in the eyes of many traders and commentators, with some now forecasting three cash rate cuts before the end of the year.

But let's not get ahead of ourselves.

Home lenders continue to adjust their fixed rates lower while no doubt priming for imminent variable rate action across the market.

See also: Fixed Rate Home Loans: Benefits and Drawbacks

Here's all the home loan rate movements this week.

Macquarie drops fixed rates, one below 5%

Australia's fifth-largest home lender has taken another chop at its fixed rates this week.

Macquarie Bank's best new rate is now under the 5% mark at 4.99% p.a. (5.54% p.a. comparison rate*) for owner occupiers fixing for two years with ≤70% loan-to-value ratio (LVR) on a basic loan.

The comparison rate* rises to 5.77% p.a. for those with the same LVR opting for an offset account.

See also: Different types of home loans and how they work

Macquarie now joins a handful of lenders offering a fixed interest rate below 5%.

Here are Macquarie Bank's new owner occupier fixed rates below:

Fixed term	LVR	Interest rate	Comparison rate* (basic)	Comparison rate* (offset)
1 year	≤70% LVR	5.09% p.a.	5.61% p.a.	5.84% p.a.
	≤80% LVR	5.19% p.a.	5.66% p.a.	5.89% p.a.
	≤95% LVR	5.45% p.a.	6.59% p.a.	6.81% p.a.
2 year	≤70% LVR	4.99% p.a.	5.54% p.a.	5.77% p.a.
	≤80% LVR	5.09% p.a.	5.60% p.a.	5.83% p.a.
	≤95% LVR	5.59% p.a.	6.50% p.a.	6.72% p.a.
3 year	≤70% LVR	5.09% p.a.	5.51% p.a.	5.74% p.a.
	≤80% LVR	5.19% p.a.	5.58% p.a.	5.91% p.a.
	≤95% LVR	5.69% p.a.	6.43% p.a.	6.65% p.a.
4 year	≤70% LVR	5.29% p.a.	5.54% p.a.	5.77% p.a.
	≤80% LVR	5.39% p.a.	5.61% p.a.	5.84% p.a.
	≤95% LVR	5.89% p.a.	6.42% p.a.	6.64% p.a.
5 year	≤70% LVR	5.29% p.a.	5.51% p.a.	5.75% p.a.
	≤80% LVR	5.39% p.a.	5.59% p.a.	5.82% p.a.
	≤95% LVR	5.89% p.a.	6.36% p.a.	6.58% p.a.

And rates for investors making principal and interest (P&I) repayments:

Fixed term	LVR	Interest rate	Comparison rate* (basic)	Comparison rate* (offset)
1 year	≤70% LVR	5.25% p.a.	5.72% p.a.	5.94% p.a.
	≤80% LVR	5.35% p.a.	5.82% p.a.	6.04% p.a.
	≤90% LVR	5.75% p.a.	6.63% p.a.	6.85% p.a.
2 year	≤70% LVR	5.15% p.a.	5.65% p.a.	5.88% p.a.
	≤80% LVR	5.25% p.a.	5.75% p.a.	5.98% p.a.
	≤90% LVR	5.59% p.a.	6.50% p.a.	6.72% p.a.
3 year	≤70% LVR	5.25% p.a.	5.63% p.a.	5.86% p.a.
	≤80% LVR	5.35% p.a.	5.73% p.a.	5.96% p.a.
	≤90% LVR	5.69% p.a.	6.43% p.a.	6.66% p.a.
4 year	≤70% LVR	5.45% p.a.	5.66% p.a.	5.89% p.a.
	≤80% LVR	5.55% p.a.	5.76% p.a.	5.99% p.a.
	≤90% LVR	5.79% p.a.	6.39% p.a.	6.61% p.a.
5 year	≤70% LVR	5.45% p.a.	5.64% p.a.	5.87% p.a.
	≤80% LVR	5.55% p.a.	5.74% p.a.	5.97% p.a.
	≤90% LVR	5.79% p.a.	6.32% p.a.	6.55% p.a.

The rates are higher for investors making interest only repayments.

Across the board, Macquarie's fixed interest rates dropped by up to 20 basis points.

Up rate cut takes effect

Up hasn't waited for the RBA cash rate call, cutting five basis points from its owner occupier variable rate, taking it to a competitive 5.45% p.a. (5.45% p.a. comparison rate*) from 1 August.

Notably, the online bank applies its home loan rate movements to all customers - new and existing.

Up, a brand of Bendigo and Adelaide Bank, permits lending up to 90% LVR and includes a free offset account.

The out-of-cycle rate cut may be an early shot before the next round of cuts across the market but it could also be a square up for a surprise 0.05% rate rise at the end of last year.

Up borrowers will no doubt be waiting to see whether the lender passes on any upcoming cut to the cash in full. 

Auswide Bank adjusts variable rates early

Auswide Bank was the only other bank to adjust its variable rates this week, some by as much as 25 basis points.

Its best new rate is 5.54% p.a. (5.90% p.a. comparison rate*) for owner occupiers taking out a Freedom package home loan with ≤60% LVR and making P&I repayments - a 10 basis point cut.

Here's a look at Auswide's new variable rates for owner occupiers taking out package loans and making P&I repayments:

Freedom Package	(% change)	New rate	Comparison rate*
≤60% LVR	-0.10	5.54% p.a.	5.90% p.a.
60-70% LVR	-0.10	5.59% p.a.	5.95% p.a.
70-80% LVR	-0.10	5.69% p.a.	6.05% p.a.
80-90% LVR	-0.11	5.98% p.a.	6.33% p.a.

Auswide has also shaved another basis point off its Basic owner occupier home loan rate, taking it to 5.98% p.a. (6.01% p.a. comparison rate*) for those with 80-90% LVR making P&I repayments.

But it's made a much bigger chop to some of its variable investor rates this week.

The rates below are for investors making P&I repayments:

Product	% change	New rate	Comparison rate*
Basic P&I ≤60% LVR	-0.15	5.74% p.a.	5.77% p.a.
60-70% LVR	-0.10	5.84% p.a.	5.87% p.a.
70-80% LVR	-0.15	5.89% p.a.	5.92% p.a.
80-90% LVR	-0.15	6.34% p.a.	6.38% p.a.
Freedom Package ≤60% LVR	-0.25	5.74% p.a.	6.10% p.a.
60-70% LVR	-0.20	5.84% p.a.	6.20% p.a.
70-80% LVR	-0.20	5.89% p.a.	6.24% p.a.
80-90% LVR	-0.05	6.34% p.a.	6.69% p.a.

That's the latest variable rate action on the market - for now at least.

Let's get back to some more dramatic cuts to fixed rates this week.

The Mutual Bank matches market low rate

The Mutual Bank has matched the market's lowest interest rate of 4.94% p.a., taking a hefty 55 basis points off its two- and three-year package home loan fixed rates (7.12% p.a. comparison rate* - 2 year; 6.92% p.a. comparison rate* - 3 year).

According to the Savings.com.au data base, it matches Greater Bank's rate of 4.94% p.a., announced last week.

Here's a look at The Mutual Bank's fixed owner occupier home loan rates below:

Product	% change	New rate	Comparison rate*
Package 1 year	-0.25	5.44% p.a.	7.39% p.a.
2 year	-0.55	4.94% p.a.	7.12% p.a.
3 year	-0.55	4.94% p.a.	6.92% p.a.
Standard 1 year	-0.25	5.54% p.a.	7.87% p.a.
2 year	-0.55	5.04% p.a.	7.52% p.a.
3 year	-0.55	5.04% p.a.	7.25% p.a.

The Mutual Bank's two- and three-year fixed rates for investor loans have also taken the plunge, down to 5.14% (7.45% p.a. comparison rate* - 2 year; 7.22% p.a. comparison rate* - 3 years).

The same rates apply for both P&I and IO repayments.

G&C Mutual/Unity Bank take up to 56 bp off fixed rates

The merger partners have taken the knife to residential and investor fixed rates this week although their best rate of 5.19% p.a. (5.27% p.a. comparison rate*) is still a way off the 5% mark.

That rate applies to owner occupiers fixing for two years and making P&I repayments.

G&C Mutual and Unity Bank made their biggest chop to the two-year fixed rate for investors making IO repayments.

That's come down to 5.69% p.a. (5.77% p.a. comparison rate*), a 56 basis point cut.

Image by Ketut Subiyanto via Pexels

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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Important Information and Comparison Rate Warning