Fixed rates much cheaper than variable

Australia’s biggest banks are trying to lure home buyers with fixed rate mortgages.

Commonwealth Bank is offering four-and five-year loans at 6.14 percent, the lowest in more than nine years. That compares with 6.8 percent on its standard variable rate loans.

Members Equity Bank is offering the cheapest one-year and three- year loans since it became a bank in 2001.

Westpac has seen an increase in customers shifting to fixed rate mortgages since it started offering the cheaper rates, said spokesman Danny John. “It’s a very competitive market and therefore we are pricing competitively,” he said.

Source: Bloomberg