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Turbocharge WealthFollowing the Reserve Bank of Australia’s (RBA) recent decision to reduce the cash rate to 4.1%, a wave of adjustments in home loan rates has swept across various lenders. Canstar’s data reveals that 29 lenders have slashed 232 owner-occupier and investor variable rates by an average of 0.24%. Additionally, 12 lenders have decreased 177 owner-occupier and investor fixed rates by an average of 0.31%.
As a result of these changes, the average variable interest rate for owner-occupiers paying principal and interest now hovers around 6.74%. Despite this, competitive offerings are still prevalent, with the lowest variable rate standing at 5.69%, extended by Qudos Bank, Regional Australia Bank, and MOVE Bank. Notably, these rates exclude special categories such as introductory rates and those tailored for first-time home buyers or eco-friendly loans.
Canstar’s data insights director, Sally Tindall, emphasized the significant impact of these rate adjustments on Australian mortgage holders, particularly first-home buyers who are under financial strain due to high entry-level home repayments. Tindall pointed out the competitive advantage maintained by major banks like CBA and ANZ, which are offering lower advertised variable rates starting from 5.9% and 5.84% respectively, in contrast to Westpac and NAB, where rates are higher at 6.19%.
The competitive landscape among banks is witnessing shifts in customer preferences and influencing growth patterns within the major players. CBA and ANZ have experienced a 6% year-on-year growth in their residential mortgage books from January 2024 to January 2025, while Westpac and NAB have seen more modest increases of 4% and 3% respectively over the same period. Macquarie Bank, on the other hand, is challenging the dominance of major banks with a competitive lowest advertised variable rate of 5.89% and a notable 16% surge in its home loan book over the past year.
Looking ahead, the realm of home loan rates is evolving rapidly, with 15 lenders currently offering at least one variable rate below 5.75%, excluding special rates. This number is expected to rise as further adjustments post-RBA rate cut come into effect. Tindall advised potential refinancers and new loan seekers to closely monitor deviations from the standard 0.25% rate drop, as observed in some cases.
In response to the rate cut, many borrowers are contemplating refinancing, as indicated by a recent Mozo report. This trend underscores the significant impact of RBA’s monetary policy decisions on the mortgage market. The ongoing adjustments in home loan rates reflect a dynamic environment where lenders are striving to attract and retain customers through competitive offerings and strategic rate adjustments.
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