Key points
  • With a cash rate cut looming, lenders continued dropping home loan interest rates this week
  • The Mac's latest change was a highlight, bringing a new market-leading rate for two-year fixed terms
  • Bank First also make waves when it cut variable investor home loans 

Its official folks: There’s a new market-leading, two-year fixed rate on offer, according to InfoChoice market analysis.

Those signing on to a new two-year fixed rate period could now take advantage of the 5.69% p.a. interest rate (7.53% p.a. comparison rate*) by the Macarthur Credit Union (The Mac). 

That's notably lower than the average interest rate on a new fixed rate home loan (for periods of three years or less) funded in the month of January – 6.20% p.a. according to Reserve Bank data.

And while seeming confidence in looming Reserve Bank rate cuts could bear excitement for home loan borrowers everywhere, the question as to when they could commence remains unanswered. 

The Australian Bureau of Statistics (ABS) released the latest monthly inflation figures on Wednesday. 

The monthly read has stagnated above the central bank’s ideal level, at 3.4% on an annual basis, for three consecutive months now.

Perhaps there’s truth to the age-old metaphor: The home stretch is often the toughest.

“How inflation has moved in Australia has been very similar to how inflation has moved … in other countries, which are about six months ahead of us,” Bank of Queensland chief economist told the Savings Tip Jar podcast recently.

“From 3.00%-3.50% inflation, the last step down to the 2%s has been the hardest.”

The expert is predicting the first rate cut to come in November, while admitting he believes it's likely to be later than earlier. 

With all that considered, chances are it could be some time before we see variable rates drop across the board. 

Fortunately, 2024 is still bringing fixed rate bargains, at least compared to those offered in months gone by. 

The Mac slashes up to 90bps, posting new market-leading fixed rate

Fixed home loan rates below 5.70% p.a. have existed for some time now.

They’re currently offered on fixed terms of three- to five-years by the likes of Horizon Bank, HSBC, and RACQ. 

But, for the first time in a long time, a rate of 5.69% p.a. (7.53% p.a. comparison rate*) is available on standard two-year fixed periods, thanks to The Mac.

Not to mention, borrowers with LVRs of up to 95% could be eligible for the newly lowered rate, which sits 90 basis points below where it did last week.

The Mac also cut the rate offered to investors looking to fix their rate for a two-year period to 5.99% p.a. (7.64% p.a. comparison rate*) – a 70 basis point week-on-week reduction.  

Bank First drops investor home loan rates by as much as 20bps

The other major mover this week was Bank First, which cut many of its investor home loan rates by as much as 20 basis points this week.

Property investors with a loan-to-value ratio (LVR) of 60% or less can now realise a 6.34% p.a. variable rate (6.37% p.a. comparison rate*) on the Victorian mutual bank's basic, principal & interest (P&I) product.

Meanwhile, those with an LVR of between 60% and 80% could realise a 6.44% p.a. variable interest rate (6.47% p.a. comparison rate*). 

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