In general, a fixed rate that is lower than the variable rate is an indication that a lender expects the cash rate to fall. If a loan provider anticipates an interest rate hike, the fixed rate goes up. 

In the same vein, fixed interest rates are also a reflection of wholesale swap rates and other types of funding.

Economists believe the cash rate, which currently sits at 4.35%, has peaked and is on its way down. Given the latest data on inflation indicators, they might be right. 

This week’s mortgage rate movements appear to be suggesting that the industry is predicting and is now preparing for a cash rate cut sometime this year, which is expected to spark demand for properties and home lending once again.

Brett Sutton of mortgage broker Two Shoes sees these adjustments as the lenders’ way to retain customers as the market is about to get more competitive. 

“However, an element of caution is needed as the RBA attempts to strike a balance between managing inflation, and ensuring rate rises don’t cause unnecessary pain to Australian mortgage holders,” he said. 

While Mr Sutton doesn’t see interest rates returning to their record low when it hit 0.1% in November 2020, he is confident that “there is an end in sight to the current period of high interest rates.”

Here are some mortgage lenders that now offer lower fixed interest rates.

Macquarie Bank fixed rates down to as low as 5.99% p.a.

Macquarie Bank made some large cuts on its fixed home loan rates this week, dropping 56 basis points to as low as 5.99% p.a. (6.19% p.a. comparison rate*).

This rate is available for three-year home loans for owner-occupiers with loan-to-value ratios (LVRs) of 70% or less. 

Here are the changes on owner-occupied products with LVR of 80%:

AMP cuts fixed rates by as much as 40 basis points

This week, AMP Bank joined other lenders in cutting advertised fixed interest rates offered to home loan borrowers. 

Here are some of the changes for owner-occupiers:

For investors: 

BOQ drops fixed rates by up to 76 basis points

New borrowers looking for an investment home loan product locked for four years can get a much lower rate from BOQ this week after slashing it by as much as 76 basis points, leaving it at  6.49% p.a. (6.63% p.a. comparison rate*).

Here are other investment mortgage products (LVR <80%) that moved rates this week.

For owner-occupiers, here are the new rates for fixed products:

More banks join in the rate cutting spree

ME Bank followed its parent company BOQ in lowering fixed interest rates on owner-occupied and investment home loans by as much as 40 basis points. 

Great Southern Bank slashed its fixed-rate products, with three- and five-year term home loans getting the most of the cut at 25 basis points. 

Other movers:

• BCU Bank bucked this week’s trend, by increasing its fixed interest rates (except for one product) by up 50 basis points.
• Credit Union SA hiked its variable interest rates by 25 basis points.
• Reduce Home Loans increased its variable interest rates by 40 basis points.
• Suncorp Bank varied variable interest rates by up to 5 basis points.

Read more: Home Loans News

Bernadette Lunas

Finance Journalist

Bernadette is a journalist with years of experience covering topics in macroeconomics, real estate, and lifestyle beats for notable print media organisations. She joined the InfoChoice Group in 2024, bringing her passion for writing stories that help Australians make better decisions about money.

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