While the major banks sat on their hands this week, some of their smaller peers were notably busy.
In fact, one dropped a bomb on the mortgage market, slashing honeymoon interest rates on variable rate home loans to under 6% p.a.
While sub-6% p.a. home loan interest rates are not unheard of at the moment (check out some of the lowest rates on the market right now), it's certainly uncommon and compares well to many of the rates on offer from the big four banks.
The move came despite the Reserve Bank of Australia (RBA) revealing the board turned on its heels at its May meeting.
The RBA board considered hiking the cash rate once again this month despite having dropped the topic at its March meeting.
Most experts agree that the cash rate has likely reached its peak in the current cycle, but only time will tell if that turns out to be the case.
For now, our attention is firmly on banks and lenders. So, without further ado, here are this week's mortgage movers and shakers.
Horizon Bank slashes variable rates to as low as 5.99% p.a.
In a major market shakeup, customer-owned Horizon Bank dropped interest rates on its Home Sweet Home mortgage product this week.
It now offers a rate of 5.99% p.a. for borrowers with a loan-to-value ratio (LVR) of 70% or less.
That sees another smaller market player besting the big four banks - by a long shot.
While some of the big four, CommBank for instance, offer variable rates around the 6.50% p.a. mark, there are more and more lenders promising more than 50 basis points less per annum.
Bank Australia, Australian Mutual Bank and G&C Mutual Bank are among the smaller, customer-owned banks promising eligible borrowers a variable rate lower than 6.00% p.a.
For context, the typically new, variable rate, owner-occupier home loan signed in March offered an interest rate of 6.3%, according to RBA figures.
Some of the recently-dropped rates on offer from Horizon Bank include:
|
Product |
LVR |
Change |
New rate (% p.a.) |
Comparison rate* (% p.a.) |
|
Home Sweet Home (discounted variable rate, P&I) |
≤70% |
-10bp |
5.99% |
6.61% |
|
Home Sweet Home (discounted variable rate, P&I) |
≥70% |
-10bp |
6.14% |
6.75% |
|
Investment Home Sweet Home (discounted variable rate, P&I) |
≤70% |
-10bp |
6.24% |
6.85% |
|
Investment Home Sweet Home (discounted variable rate, P&I) |
≤70% |
-10bp |
6.39% |
7.00% |
But beware, those new rates listed above are offered as part of a 'honeymoon discount' and will bounce by 50 basis points after the first two years.
Bank of Sydney raises interest rates on some products by 15bps
In not-so-exciting news, Bank of Sydney lifted rates on its BOS Basic and Expect More home loan products for owner-occupiers.
Changes included:
|
Product Name |
LVR |
Change |
New rate (% p.a.) |
Comparison rate* (% p.a.) |
|
BOS Basic Home Loan P&I |
≤70% |
+5bps |
6.14% |
6.18% |
|
Expect More Owner Occupied Home Loan P&I |
≤80% |
+15bps |
6.29% |
6.44% |
And while investors saw interest rates on some Expect More variable rate products lifted by up to 15 basis points, those with LVRs of up to 60% making interest only repayments saw rates slashed by 10 basis points on the BOS Basic product.
Newcastle Permanent hikes special offer home loan rates
Finally, Horizon Bank wasn't the only one making changes to its special offers this week.
Newcastle Permanent joined in on the action. Though, it moved in a different direction.
The mutual bank hiked many of its special offer interest rates by as much as 15 basis points this week.
New rates for owner occupiers with loans valued at more than $150,000 making principal and interest repayments include:
|
Product Name |
LVR |
Change |
New rate (% p.a.) |
Comparison rate (% p.a.) |
|
Real Deal (special offer) |
≤80% |
+5bps |
6.09% |
6.13% |
|
Real Deal (special offer) |
80%-95% |
+5bps |
6.74% |
6.78% |
|
Premium Plus Package (variable, special offer) |
≤80% |
+5bps |
6.14% |
6.48% |
|
Premium Plus Package (variable, special offer) |
80%-95% |
+5bps |
6.95% |
7.28% |
While investors taking out a similar loan might be interested to learn of these newly hiked rates:
|
Product Name |
LVR |
Change |
New rate (% p.a.) |
Comparison rate (% p.a.) |
|
Premium Plus Package Investment (variable, special offer) |
80% |
+5bps |
6.28% |
6.62% |
|
Premium Plus Package Investment (variable, special offer) |
80%-95% |
+5bps |
7.14% |
7.47% |
|
Real Deal Investment (special offer) |
80%-95% |
+5bps |
6.88% |
6.82% |
Other movers
And that wasn't all the action this week. Other home loan interest rate movers included:
- Beyond Bank dropped its fixed interest rates by up to 10 basis points
- Queensland Country Bank hiked some of its fixed interest rates by 30 basis points
Image by david henrichs on Unsplash
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