Fixed rate home loans across all terms and categories have been sliding down since the start of the year as the market anticipates RBA to finally shift from its tightening bias and begin dropping the cash rate from its 12-year high. 

In its February Product Insights, InfoChoice noted fixed rate adjustments, many of which were cuts, were carried out by 14 providers last month, driving the average fixed rate on its database down 32 basis points from 6.81% p.a. to 6.49% p.a.

Though the latest economic indicators affirm the banks' and lenders’ decision to cut mortgage rates, the RBA’s reluctance to rule out the possibility of another rate hike is keeping everyone on their toes. 

It was quite evident in the movement of variable home loans this month.  

According to the InfoChoice database, variable rate movements in February were generally trending upwards, with the average owner occupier home loan paying interest only (IO) up 12 basis points to 7.43% p.a. from January, while products paying principal and interest (P&I) lifted one basis point to 6.50% p.a.

Meanwhile, the average investment home loan variable rate for P&I on its record was up nine basis points to 6.85% and 10 basis points to 7.04% for IO.  

As last month saw inflation holding steady at 3.4%, the unemployment rate rising at a two-year high of 4.1%, and wages growing faster than the rise in the cost of living at 4.2%, a rate hike at the next RBA meeting on 18-19 March seems all the more unlikely. 

But again, only the Board can literally tell, though the consensus is that the cash rate will be kept at 4.35% until the easing cycle kicks off in the second half of 2024. 

CBA and Westpac forecast the first rate cut to begin in September, while those at NAB and ANZ have their money in November. 

If those forecasts were correct, we have a couple more months of waiting for interest rates to cool down. 

In the meantime, these are the rate adjustments we saw on home loans this week ending 1 March. 

Bendigo Bank hikes up Express home loans

Bendigo Bank hiked the variable rates on its online-only home loan by up to seven basis points. 

Available exclusively to new customers, Express home loans featured the retail bank’s lowest variable rates at 5.97% p.a. for owner occupiers paying principal and interest.

However, this week’s adjustment has brought the rate of Bendigo’s Express variable P&I up four basis points to 6.01% p.a. (6.14% p.a. comparison rate). 

Meanwhile, its Investment Express variable P&I is now up seven basis points, leaving the rate at 6.29% p.a. (6.42% p.a. comparison rate). 

Beyond Bank slashes fixed rates, boosts variable

Customer-owned Beyond Bank slashed the rates across its range of fixed home loans, while simultaneously upping those on variable rates. 

The Adelaide-based mutual bank dropped the fixed rates offered to customers and investors by as much as 35 basis points. Fixed home loans for first home buyers also got a considerable cut, up to 30 basis points, perhaps in an effort to capture new customers in a stabilising market.  

On the other hand, variable rates on owner occupier and investor mortgage products got as much as 10 basis points of increase. 

Qudos Bank drops fixed rates by up to 20 basis points

Mortgages with longer terms offered by Qudos Bank are now tracking towards the low 6% p.a. range after cutting its fixed rates this week. 

The bank’s lowest home loan rate to date is available for owner-occupiers signing on for four- to five-year terms. 

Community First Bank hikes investment home loan rates

Sydney-based Community First Bank applied rate hikes on its various investment home products offered to new and existing customers. 

Reduce Home Loans launches new products

Non-bank lender Reduce Home Loans has launched new products for investors. 

The opening rate of its variable Basic Investment is 6.25% p.a. (6.27% p.a. comparison rate). It offers unlimited repayments and a full redraw facility. 

Reduce Home Loans has also introduced Basic Home Loan Investment with an opening variable rate of 6.29% p.a. (6.35% p.a. comparison rate). 

It also comes with a full redraw facility and offers 0% monthly or annual fees 

Other movers this week:

• Yellow Brick Road ups rates on Essential Options Prime products by up to 30 bps.
• Regional Australia Bank hikes fixed and variable rates by up to 9 bps.
• Up lowers variable home loan rates by as much as 20 bps.

Read more: Home Loans News Home Loan Basics

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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