Mortgage market moves: HSBC, Westpac Group unveil rates from 5.59%

A new market-leading home loan rate has emerged from a major bank this week, with HSBC dropping some of its advertised fixed mortgage rates to as low as 5.59% p.a.

It comes on the heels of last week's rate cuts from Westpac and CommBank and amid the latest inflation read.

The monthly inflation indicator came in at 3.5% p.a. over the 12 months to July, the Australian Bureau of Statistics (ABS) revealed on Wednesday.

While still a far cry from the 2% to 3% inflation target set by the Reserve Bank of Australia (RBA), the read is lower than it was in the previous month (3.8%), suggesting the battle is being won - albeit slower than was once expected.

So, what does that mean for mortgage holders?

Well, hopes of a cash rate cut are still high among experts, with the majority appearing to believe mortgagors might see some relief early next year.

Meanwhile, the stage three tax cuts appear to have already eased the burden for many.

Their implementation coincided with a drop in mortgage stress, as per new figures from Roy Morgan.

If you're in the market for a home loan, or you're considering refinancing to a more competitive mortgage product, check out this week's changes below.

HSBC unveils market-leading 5.59% p.a. home loan interest rate

International giant HSBC is making waves in the Australian home loan market, slashing fixed rates to sit among the lowest available right now.

The bank dropped rates on many of its fixed products by up to 40 basis points this week, with borrowers turning to its packaged offering now potentially able to secure a rate of 5.59% p.a.

That's in line with the discounted three-year fixed rate promised by Community First Bank's Accelerator home loan (6.29% p.a. comparison rate*, max loan-to-value ratio (LVR) 80%) and the five-year fixed rate RACQ Bank advertises to Queensland borrowers (6.16% p.a. comparison rate*, max LVR 60%).

The new rates offered on HSBC's fixed, packaged home loan product for owner-occupiers with LVRs of 80% or less making principal and interest repayments include:

Fixed rate period	Change	New rate (p.a.)	Comparison rate* (p.a.)
One year	-40bp	5.79%	LVR ≤60%	6.51%
			LVR ≤80%	6.60%
Two years	-40bp	5.69%	LVR ≤60%	6.46%
			LVR ≤80%	6.54%
Three years	-40bp	5.59%	LVR ≤60%	6.39%
			LVR ≤80%	6.46%
Four years	-40bp	5.59%	LVR ≤60%	6.34%
			LVR ≤80%	6.40%
Five years	-40bp	5.59%	LVR ≤60%	6.30%
			LVR ≤80%	6.35%

It's important to note that HSBC's home loan package demands an annual fee of $390. It also provides borrowers with a lower interest rate and a waiver on establishment, valuation, and settlement fees.

But it wasn't all downwards moves from HSBC this week.

The bank also lifted the discounted variable interest rate advertised on its Smart Home mortgage product by up to 10 basis points.

The Smart Home line up's lowest advertised rate is now 6.29% p.a. (6.65% p.a. comparison rate*), which is available to owner-occupiers with 20% deposits making principal and interest repayments.

Westpac subsidiaries cut fixed home loan interest rates

Westpac-owned banks St George, BankSA, and Bank of Melbourne also lowered fixed home loan rates advertised to borrowers this week.

The moves may have been expected, given their parent company joined the suite of big banks slashing fixed rates just last week.

New rates on offer to owner-occupiers with LVRs of 70% or less making principal and interest repayments and signing on to the Advantage Package include:

Product	Change	New rate (p.a.)	Comparison rate* (p.a.)
One year fixed	-45bp	6.14%	7.59%
Two years fixed	-65bp	5.84%	7.41%
Three years fixed	-65bp	5.94%	7.30%
Four years fixed	-65bp	5.94%	7.19%
Five years fixed	-75bp	5.94%	7.08%

The banks' Advantage Package offers a 15 basis point discount to its traditional fixed rates at the cost of a $395 annual fee.

Teachers Mutual Bank drops variable home loan rates

Teachers Mutual Bank Limited – the group that houses Teachers Mutual Bank, UniBank, Firefighters Mutual Bank, Health Professionals Bank, and Hiver – slashed its lowest-rate home loan offering this week.

The variable rate Your Way home loan product now boasts rates as low as 6.14% p.a.

Changes put forward for both owner occupiers and investors this week included:

Product	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
Your Way Basic Home Loan P&I	≤80%	-10bp	6.14%	6.20%
Your Way Basic Home Loan P&I	>80%	-10bp	6.79%	6.86%
Investment Your Way Basic Home Loan P&I	≤80%	-10bp	6.44%	6.50%
Investment Your Way Basic Home Loan IO	≤80%	-10bp	6.84%	6.67%

Other movers

• Hume Bank cut fixed rates on its myBlue home loan by up to 30 basis points
• Horizon Bank lowered discounted variable rates on its Home Sweet line up by up to 10 basis points
• Heritage Bank shook up its fixed rates by up to 1.9%
• Regional Bank of Australia made various changes of up to 89 basis points across its variable rate, fixed rate, and offset range

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Important Information and Comparison Rate Warning

_{Image by Victor He on Unsplash}