It's a rare sight to see a home loan interest rate around 5.50% p.a. in 2024. And it's even rarer now, after Australian Mutual Bank hiked its fixed rate offering for first home buyers.
The customer-owned institution promised first-time homeowners a fixed interest rate of 5.53% for a two-year period this time last week.
That rate has since been bumped to a still-competitive 5.64% p.a. (6.32% p.a. comparison rate*).
Here is a breakdown of the mortgage changes that went down this week.
Australian Mutual Bank hikes interest rates by up to 46 basis points
As mentioned above, Australian Mutual Bank lifted the rate on its First Home Buyer special offer which, until recently, advertised a two-year-fixed interest rate of 5.53% p.a. – nearly unheard of in the current climate.
Alas, that rate was hiked by 11 basis points this week.
And it wasn't the only fixed rate to be bumped by the bank, with other shifts for home loans with principal and interest (P&I) repayments including:
|
Product |
LVR |
Change |
New rate (p.a.) |
Comparison rate* (p.a.) |
|
Residential |
≤95% |
+11bp |
5.74% |
6.37% |
|
Residential |
≤95% |
+26bp |
5.74% |
6.31% |
|
Residential |
≤95% |
+26bp |
5.89% |
6.27% |
|
Investment |
≤95% |
+31bp |
6.04% |
6.83% |
|
Investment |
≤95% |
+46bp |
6.04% |
6.75% |
|
Investment |
≤95% |
+46bp |
6.19% |
6.68% |
Greater Bank slashes special offer variable rates
Joining in on the action of adjusting special rates, though this time in the opposite direction, was Greater Bank.
The mutual bank slashed rates on its variable home loans by as much as 15 basis points this week.
Changes included:
|
Product |
LVR |
Change |
New rate (p.a.) |
Comparison rate* (p.a.) |
|
Great Rate Home Loan |
≤80% |
-10bp |
6.04% |
6.05% |
|
Ultimate Home Loan |
≤80% |
-15bp |
6.19% |
6.56% |
|
Great Rate Investment Home Loan |
≤80% |
-10bp |
6.29% |
6.30% |
Heritage Bank drops variable interest rates by up to 15 basis points
Finally, Heritage Bank slashed some of its variable rate offerings while hiking many of its fixed rate products.
For owner-occupiers, new rates include:
|
Product Name |
LVR |
Change |
New rate (p.a.) |
Comparison rate* (p.a.) |
|
Home Advantage Variable |
80-90% |
-15bp |
6.64% |
6.98% |
|
Home Advantage Variable |
80-90% |
-15bp |
6.59% |
6.93% |
|
Discount Variable |
80-90% |
-15bp |
6.49% |
6.51% |
Meanwhile, investors might find these changes eye catching:
|
Product Name |
LVR |
Change |
New rate (p.a.) |
Comparison rate* (p.a.) |
|
Investment Discount Variable |
80-90% |
-15bp |
6.74% |
6.76% |
|
Home Advantage Investment Variable |
80-90% |
-15bp |
6.89% |
7.23% |
|
Home Advantage Investment Variable |
80-90% |
-15bp |
6.84% |
7.18% |
Other movers
- Northern Inland Credit Union dropped fixed interest rates by up to 20 basis points
Upcoming RBA meeting
Amongst all of that, another sliver of data to be perused by the Reserve Bank of Australia (RBA) board when it makes its next cash rate decision was released.
The Australian Bureau of Statistics (ABS) dropped the latest unemployment figures on Thursday.
Unemployment is related to inflation as the more people are in work, the more money is flying around the economy and, the more money in the economy, the more inflation tends to bite.
The unemployment rate ticked up slightly to 4.1% on a seasonally adjusted basis – a promising sign, but not one likely to rule out a rate movement when the RBA board meets in just over a fortnight's time.
"The June labour force data does not support an increase in the cash rate in August," CommBank head of Australian economics Gareth Aird said.
"But it will not stand in the way of a rate hike if the [second quarter] inflation data is sufficiently strong."
The next quarterly inflation figure will be released on 31 July and the RBA board will come together just days later, with its decision to be handed down on 6 August.
Image by Mathias Jensen on Unsplash
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