Aussie lenders shake up home loan rates in wake of RBA decision

The latest RBA meeting turned out to be a non-event. Or, at least, that's what it looked to be when RBA-watchers first heard the board had chosen to hold the cash rate at 4.35% on Tuesday. 

However, in the wake of the decision, it was revealed that the RBA board not only doesn't expect to cut rates this year, it even went so far as to consider hiking rates in August.

That came as a shock to many.

Big four bank Westpac adjusted its prediction for the first rate cut on the back of the revelation and a few smaller lenders shook up their advertised home loan rates.

Westpac now joins ANZ in forecasting a cut in February 2025, leaving CommBank alone in anticipating a November cut and NAB trailing in expecting a May 2025 cut.

In more immediate news, G&C Mutual Bank hiked what once appeared to be the lowest variable rate on offer from any Australian bank and Westpac closed down its RAMS brand to new borrowers.

Let's dive deeper into what went down in the mortgage market this week.

G&C Mutual Bank hikes market-leading home loan rate

Speaking of major moves, G&C Mutual Bank shook things up when it hiked the rate on its once-market leading Essential Workers Home Loan product by 15 basis points.

The product, available to the likes of paramedics, firefighters, police officers, nurses, and teachers, previously promised a variable rate of 5.80% p.a. (5.83% p.a. comparison rate*).

As of this week, however, it now advertises a rate of 5.95% p.a. (5.98% p.a. comparison rate*).

While that's still competitive, it's no longer the market's lowest, coming in near those advertised on mortgage products from Tiimely Home and Up Bank, to name a few.

Regional Australia Bank shakes up variable & fixed rates

Meanwhile, Regional Australia Bank repriced much of its home loan portfolio.

It made notable moves among fixed rate and offset mortgages for both owner-occupiers and investors.

Changes made to rates on its offset offerings for those making principal and interest repayments included:

Owner-occupier or investor?	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
Owner-occupier	<60%	+5bp	6.29%	6.30%
Owner-occupier	60-70%	+2bp	6.48%	6.49%
Owner-occupier	70-80%	+2bp	6.66%	6.67%
Owner-occupier	80-90%	-5bp	6.83%	6.84%
Investor	<60%	+1bp	6.45%	6.46%
Investor	60-70%	-5bp	6.81%	6.82%
Investor	70-80%	-9bp	7.00%	7.01%
Investor	80-90%	-11bp	7.18%	7.19%

Meanwhile, the bank's fixed rate lineup underwent major adjustments.

The lowest fixed rate on offer from Regional Australia Bank is now 6.19% p.a.

Interestingly, that rate is available for owner-occupiers borrowing with a loan-to-value ratio (LVR) of 60% or less, no matter whether they fix for a period of one year or five (comparison rates* vary from 6.10% p.a. to 6.14% p.a. depending on the length of the fixed rate period).

RAMS home loans shut down by Westpac

Finally, there was major news from Westpac this week, with the big four bank announcing it's closed its RAMS brand to new borrowers.

The mortgage brand has had a rough trot lately, having drawn attention from regulators and a class action from former franchisees.

"We have delivered considerable portfolio simplification over recent years, and after a thorough review, have decided that offering home loans through RAMS franchisees is not right for Westpac," Westpac managing director of mortgages Damien MacRae told the stock market on Wednesday.

Borrowers who already have a RAMS home loan don't need to do anything, while the brand's deposit offerings will still be available to new customers.

Anyone who has an outstanding application with RAMS will soon be contacted by Westpac and local RAMS Home Loan Centres will be closed shortly.

Other movers

And that wasn't all.

Other home loan rate moves going down this week included:

• Firstmac hiked some of its variable rate, fixed rate, green, solar, and SMSF home loans by up to 20 basis points
• Newcastle Permanent dropped many fixed rates by 10 basis points

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_{Photo by Deborah Diem on Unsplash}