RateCity notes "quiet accumulation of fixed rate cuts"
The Australian mortgage market had minimal activity in terms of rate movements over the past week, RateCity.com.au has reported.
Police Bank, along with its affiliates Border Bank and Heritage Isle, implemented the most significant reductions, lowering three-year fixed rates by up to 0.6 percentage points.
Heritage Bank and People’s Choice also reduced their three- and five-year fixed rates by 0.2 percentage points. However, they slightly increased certain new customer variable rates by 0.05 percentage points.
“The quiet accumulation of fixed rate cuts is starting to make its mark in the RateCity.com.au database,” said Sally Tindall (pictured), research director at RateCity.com.au.
“Over the last couple of years, the majority of lenders’ lowest rates have been variable ones, however, this is now starting to shift. Almost half of all lenders in our database now offer at least one fixed rate that is lower than their lowest variable – a trend we expect to continue in the months ahead.”
Tindall, however, said that recent data from the Australian Bureau of Statistics (ABS) indicates a reluctance among borrowers to commit to fixed rates, with just 2% of new and refinanced loans opting for a fixed rate.
“The RBA is back in the hot seat next week for its second meeting in 2024 under the new six-weekly meeting schedule,” she said. “While the governor said in February that further rate hikes could not be ruled out, since then, the data has continued to add weight to the argument we are now at the peak of the cash rate cycle. We expect rates to remain on hold until at least the second half of the year but potentially into 2025.”
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