Which lenders have passed on the May RBA rate cut? Mozo
Demand for fixed rate home loans has surged, with borrowers keen to take advantage of last week's record low rate cut.
The Mozo comparison site saw a 350% lift in visits to its fixed rate loan pages last week compared to the month prior.
While most lenders have passed on the full 0.25% cut, taking variable rates to as low as 3.98%, fixed rates are even lower.
Mozo data shows in May 2013, the best 3 year fixed rate was 0.24% higher than the best variable, today a popular three year fixed loan can be found for just 3.95%.
“With fixed rate loans closing the gap on variable rates, the appeal of locking-in your loan for 3 years or more has grown considerably since Tuesday.”
“With interest rates likely to stay on hold in the coming months, now could really be the time to fix and reap the savings,” said Mozo director, Kirsty Lamont.
Best variable | Rate | Best 3 year fixed | Rate | ||
1 | Homestar Variable Rate Loan | 3.98% | 1 | HSBC Fixed Rate Home Loan (Premier) | 3.95%
|
- | Loans.com.au Dream Home Loan Essentials | 3.98% | 2 | Bank of Queensland Fixed Rate Home Loan | 3.99% |
3 | Mortgage House Pure & Simple | 3.99% | - | ME Bank Flexible Home Loan (Fixed) | 3.99% |
4 | Loans.com.au Dream Home Loan Offset Variable | 4.02% | - | Newcastle Permanent Fixed Rate Home Loan | 3.99% |
5 | HSBC Home Loan Value | 4.23% | - | Queensland Police Credit Union Fixed Rate Home Loan | 3.99% |
Rates are for loans of $300,000 with an LVR of 80%. Source: Mozo.com,.au as at 8/5/15 | |||||
Monthly repayments on the lowest 3 year fixed rate of 3.95% would be $1,575, while for the lowest variable rate loan (3.98%) it’s $1,582 per month. Although it’s only a $7 difference, that amount could be a lot higher if we see rates rise before May 2018.
Mozo’s list of lenders who have passed on the rate cut has grown slowly since Tuesday, however, three of the Big 4 banks haven’t reduced rates by the whole 0.25% amount.
“With funding costs low, there is really no reason why lenders shouldn’t be passing on the full 25 basis point discount,” said Lamont.
Lender | Cut | New variable rate* |
Loans.com.au | 0.25% | 4.02% |
ING DIRECT | 0.25% | 4.72% |
MEBank | 0.25% | 4.88% |
Greater Building Society | 0.25% | 5.00% |
ANZ | 0.25% | 5.38% |
NAB | 0.20% | 5.43% |
Commonwealth Bank | 0.20% | 5.45% |
Westpac | 0.22% | 5.48% |
St George | 0.20% | 5.54% |
Bank of Queensland | 0.20% | 5.56% |
*Effective dates of new rates vary between 8/5 – 26/5.
Lamont says borrowers need to make sure their lender is passing on discounts to existing customers and not just keeping the best deals for new customers.
“Some lenders are holding off announcing the discount for existing customers, so check whether your lender is cutting rates and when you’ll be seeing lower repayments,” said Lamont.
All rates and calculations are based on a $300,000, 80% LVR loan over 25 years. Rates and calculations are current as at 6 May 2015.
