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Side HustleAs the Reserve Bank of Australia (RBA) decision on interest rates looms, the banking landscape is in flux. ANZ and Bank Australia have chosen to reduce rates, while AMP has decided to increase them, going against the trend.
With all four major banks anticipating an impending rate cut by the RBA, ANZ has taken the lead by cutting fixed home loan rates by up to 50 basis points to 5.19% p.a. Meanwhile, Bank Australia has also made reductions, lowering rates by up to 30 basis points, signaling an effort to attract borrowers amidst the competitive market.
As the RBA is expected to reduce rates further, mortgage holders are urged to remain vigilant as banks may introduce more competitive offers to entice customers. This move by ANZ and Bank Australia underscores the intensifying competition in the mortgage sector.
On the other hand, AMP Bank has opted to raise its basic variable and fixed loan rates by 25 basis points, deviating from the general trend of declining mortgage costs. While these initial rates may appear high, banks often use them as a base to offer discounts and incentives to customers.
The RBA ASX rate tracker is already factoring in a 0.25% rate cut, which would bring the cash rate to 3.60%. This aligns with the predictions made by the major banks, all of which foresee a similar reduction in the cash rate.
ANZ now boasts the lowest fixed rates among the big four banks, offering rates as low as 5.19% p.a. for owner-occupiers with an LVR of 80% or less on a two-year fixed term. Meanwhile, Bank Australia has cut its fixed-rate home loans by up to 0.30%, catering to borrowers across various terms and LVRs.
AMP Bank’s decision to increase rates may seem counterintuitive, but it reflects a strategic move to position their rates competitively in the market. While their published rates may be on the higher side, customers often receive substantial discounts, making the actual rates more attractive.
Other recent movements in the market include a reduction in SMSF loan rates by 10 basis points, a decrease in variable rates by up to 25 basis points by Police Credit Union, and an increase in comparison rates by 4 basis points by Teachers Mutual and its subsidiaries.
As the market awaits the RBA’s decision, borrowers are encouraged to compare rates and features to secure the best home loan deals available. The current environment presents an opportunity for borrowers to explore competitive rates and potentially benefit from upcoming rate cuts.
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