Macquarie slashes rates, emerges among top mortgage market contenders

Macquarie Bank dropped home loan interest rates on fixed rate periods of between one and five years by as much as 76 basis points on Tuesday.

Both owner-occupiers and investors are able to make the most of the bank's move, which sees some products now advertising rates as low as 5.79% p.a.

Macquarie's cut comes just weeks after NAB slashed its fixed rate offerings and despite the Reserve Bank of Australia (RBA) warning the cash rate could remain high for longer than previously expected.

Up until last week, many experts were anticipating a potential 2024 cash rate cut.

Such hopes appeared to be dashed when RBA governor Michele Bullock said a near-term rate cut "doesn't align with the board's current thinking" and revealed the board even considered a rate hike at its August meeting last week.

Macquarie chief economist Ric Deverell didn't rule out the possibility of another rate hike in his recent mid-year outlook, but noted he believes the economy's future looks brighter than its present.

"The Australian economy has had a difficult period," he said in late June.

"I think the worst is probably behind us [and] I do think you can look forward to a better year next year."

Macquarie cuts rates for owner-occupiers by up to 76bp

Owner-occupiers in the market for a new fixed rate home loan could make the most of the lion's share of Macquarie's Tuesday cuts.

The investment banking giant slashed fixed rates for those who own their home to as low as 5.79% p.a. - within 20 basis points of the market's most competitive, as per Your Mortgage's database.

New rates available on the bank's basic home loan product for owner occupiers making principal and interest repayments include:

Fixed rate period	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
One year	≤70%	-76bp	5.89%	6.14%
	≤80%	-76bp	5.99%	6.19%
	≤95%	-74bp	6.25%	7.12%
Two years	≤70%	-56bp	5.79%	6.10%
	≤80%	-50bp	5.89%	6.16%
	≤95%	-46bp	6.29%	7.03%
Three years	≤70%	-46bp	5.79%	6.07%
	≤80%	-46bp	5.89%	6.13%
	≤95%	-46bp	6.29%	6.95%
Four years	≤70%	-66bp	5.79%	6.04%
	≤80%	-60bp	5.89%	6.11%
	≤95%	-60bp	6.29%	6.88%
Five years	≤70%	-66bp	5.79%	6.01%
	≤80%	-60bp	5.89%	6.08%
	≤95%	-60bp	6.29%	6.81%

Market-leading fixed interest rates currently include the 5.59% p.a. three-year fixed rate offered to first home buyers with a 20% deposit by Community First Bank (6.29% p.a. comparison rate*).

The matching 5.59% p.a. five-year fixed rate RACQ Bank advertises to Queensland owner-occupiers with a loan-to-value ratio (LVR) of 60% or less might also be enticing (6.16% p.a. comparison rate*).

Whether the new rates on offer from Macquarie catch the eye of borrowers remains to be seen.

Just 2.7% of home loans written in June 2024 boasted a fixed interest rate, with the vast majority of mortgage borrowers turning to a variable rate product, according to Australian Bureau of Statistics (ABS) data.

Rates for property investors slashed by up to 70bp

Property investors eyeing fixed rate mortgages didn't realise such sizable interest rate cuts, but with rates as low as 5.99% p.a. on the table, the changes might still prick their ears.

Those seeking an investment home loan and planning to make principal and interest repayments might find their attention caught by these new deals:

Fixed rate period	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
One year	≤70%	-70bp	6.05%	6.34%
	≤80%	-70bp	6.15%	6.44%
	≤90%	-60bp	6.55%	7.24%
Two years	≤70%	-56bp	5.99%	6.30%
	≤80%	-56bp	6.09%	6.40%
	≤90%	-56bp	6.29%	7.11%
Three years	≤70%	-56bp	5.99%	6.27%
	≤80%	-56bp	6.09%	6.37%
	≤90%	-56bp	6.29%	7.02%
Four years	≤70%	-66bp	5.99%	6.24%
	≤80%	-66bp	6.09%	6.34%
	≤90%	-66bp	6.29%	6.94%
Five years	≤70%	-66bp	5.99%	6.21%
	≤80%	-66bp	6.09%	6.32%
	≤90%	-66bp	6.29%	6.87%

At 5.99% p.a., Macquarie's three-year fixed rate investment home loan is among the most competitive offerings from Australian banks, surpassed only by the likes of Horizon Bank and RACQ Bank.

Horizon Bank appears to lead with a 5.89% p.a. rate for investors with a LVR of 70% or less who lock in their interest rate for three years (6.58% p.a. comparison rate*)

Meanwhile, RACQ Bank advertises a 5.89% p.a. three- or five-year fixed rate for Queensland property investors with LVRs of 60% or less (comparison rates* vary between 6.41% p.a. and 6.60% p.a.)

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