Australian Banks Cut Fixed Mortgages Loan Rates in Latest Home-Loan War
By Vittorio Hernandez | May 20, 2013 12:42 PM EST
A week after the Big 4 passed in full the rate cut in full on their standard variable mortgage rates, Westpac initiated another round of rate reductions, this time reducing its one-year fixed-rate home loans to 4.79 per cent. The lower rate applies only to new borrowers with mortgages above $150,000.
The move prompted the Bank of Melbourne and St George to cut their one- to five-year fixed rates below 5 per cent.
"It's a further continuation of injecting more competition into the home loan marketplace, and also a confidence booster given that we've got the lowest cash rate for 53 years," Bank of Melbourne Chief Executive Scott Tanner said in a statement.
"We believe this new offer will help bolster confidence among home buyers, existing owners banking elsewhere looking to switch to a better deal and investment buyers," Westpac Retail Banking General Manager Gai McGrath said in a statement.
The new round of rate cuts is possible because of lower funding costs for banks and strong profit growth.
Kirsty Lamont of comparison Web site Mozo said the situation provides a dilemma for borrowers if they should lock now or hold back and wait for more rate cuts.
Ms Lamont said the lowest fixed one-year rate is that of the Greater Building Society at 4.74 per cent.
Due to the changing lending conditions such as out-of-cycle rate cuts independent of RBA decisions, fixed home loans finances through RateCIty reached 18.45 per cent, the highest proportion in five years.
In Westpac, take-up levels for fixed home loans doubled from 8 per cent to between 15 and 20 per cent when it cut its two-year rate to 4.99 per cent in February 2013.
At St George, fixed-rate loans went up to 30 per cent from 10 per cent when the bank cut its mortgage rate.
But in the case of the National Australia Bank, its offer of the lowest interest rates among the Big 4 failed to boost the lender's satisfaction rating among its clients.
The monthly DBM Consultants' Business Financial Services Monitor said NAB's satisfaction rating averaged 7 out of 10 in April, while ANZ got s lower 6.9 rating. NAB cut its standard mortgage rate to 6.13 per cent while ANZ reduced its rate also to 6.13 per cent.
CBA's rate is 6.15 per cent and Westpac in 6.26 per cent.
To contact the editor, e-mail:
Most Popular Slideshows
- Typhoon Rammasun Claims 18 Lives in China, Incurs $4.32B Losses (PHOTOS)
- Ellen DeGeneres Caught Cheating with Mutual Friend Before Portia de Rossi’s Rehab – Reports [PHOTOS]
- Kate Middleton's Pregnancy Hearsays: Possible Evidence Revealed [PHOTOS]
- National Ice Cream Day: Most-Ordered Flavors and Toppings by Americans [See Photos]
Join the Conversation
- Malaysian Airlines Flight 17: Air Carrier to Give $5,000 Assistance to Victims’ Families; Bankruptcy Looms as 2 Air Mishaps Would Cost Firm Minimum $80.55 M Compensation
- Foxconn And Pegatron Corp Readies For Apple's iPhone 6 Mass Production This Month
- KFC & McDonald’s Accused of Serving ‘Expired’ Meat to Customers
- Malaysian Airlines Ukraine Tragedy Hits Asian Stock Markets
- New Zealand's Largest Snack Food Company Bought for NZ$700 Million
- Fresh Leak Hints iPhone 6 Price and Release Date; 4.7-Inches iPhone 6 Sapphire Display Scratched in Test; New Spigen Cases Out
- iPhone 6 2014 Release Date Very Soon as Apple Orders 120M New iPhones from Foxconn – Report
- Google Nexus 6 on Release Date Will Sport 2K Display Panel & Lower Price Tag – Report
- Motorola Moto G Vs. Xiaomi Mi3 – Low in Price, High -level Features
- FCC Approves Sony Xperia Z3 for U.S. Market
- Killer Xiaomi Mi4 at $369 Likely to Come With 5.0-Inch Display, Snapdragon 801 Processor, 3GB RAM and More
- End of Times Indicators: Japan’s Mount Fuji in ‘Critical State’ to Erupt, Could Affect At Least 1.2M People