Major mutuals mince home loan rates as inflation dragon weakens

The Reserve Bank of Australia (RBA) board came together once more this week to do exactly as the market expected – nothing much.

The board chose to hold the cash rate at its 12-year high of 4.35% at its September meeting, saying it's not making any downward move until underlying (not headline) annual inflation sustainably returns to its target of 2% to 3%.

On that note, the monthly inflation read – which measures a smaller 'basket of goods' than its quarterly counterpart and was released on Wednesday – showed we're slowly making ground in the economic battle.

The Australian Bureau of Statistics' (ABS') latest consumer price index shows headline inflation rose 2.7% in the 12 months to August – the smallest rise in two years.

However, underlying (trimmed mean) inflation remained outside the RBA's target band, coming in at 3.4%.

All this suggests that, while high interest rates are working to cool the economy, progress remains slow and relief might still be some time away.

Nevertheless, many lenders seem to be taking matters into their own hands, with these mutual banks slashing home loan interest rates this week.

Teachers Mutual & Co cut variable and fixed rates

Teachers Mutual Bank and subsidiaries UniBank, Firefighters Mutual Bank, Health Professionals Bank, and Hiver slashed interest rates by as much as 25 basis points this week, with both variable and fixed rates receiving a haircut.

Changes to variable rates on the group's Your Way basic home loan product for borrowers making principal and interest repayments included:

Product / LVR	Change	New Interest Rate (p.a.)	Comparison Rate* (p.a.)
Owner-occupier, LVR ≤80%	-5bp	6.09%	6.15%
Owner-occupier, LVR >80%	-5bp	6.74%	6.81%
Investor, LVR ≤80%	-5bp	6.39%	6.45%
Investor, LVR >80%	-5bp	7.04%	7.11%

Meanwhile, it's Your Way Plus product, which offers a discounted interest rate (and an extra 5 basis point discount for essential workers), an offset account, and multiple waived fees, saw these rate cuts for owner-occupiers:

LVR	Change	New Interest Rate (p.a.)	Comparison Rate* (p.a.)
≤60%	-15bp	6.14%	6.44%
60%-80%	-5bp	6.24%	6.54%
80%-90%	-5bp	6.69%	6.98%
≥90%	-5bp	6.94%	7.23%

Meanwhile, the group's fixed rate lineup saw cuts of up to 25 basis points, with its basic Your Way product now offering rates from 6.09% p.a. for owner-occupiers and from 6.39% p.a. for investors.

Regional Australia Bank slashed rates to as low as 5.53% p.a.

Regional Australia Bank also slashed some of its fixed rate offerings this week, unveiling rates as low as 5.53% p.a.

Check out these new rates for owner-occupiers making principal and interest repayments:

Fixed Period	LVR	Change	New Rate (p.a.)	Comparison Rate* (p.a.)
One year	<60%	-11bp	6.03%	6.00%
	60-70%	-14bp	6.04%	6.05%
	70-80%	-11bp	6.07%	6.10%
	80-90%	-12bp	6.33%	6.47%
Two years	<60%	-24bp	5.65%	5.93%
	60-70%	-24bp	5.66%	5.97%
	70-80%	-21bp	5.69%	6.02%
	80-90%	-21bp	5.95%	6.38%
Three years	<60%	-21bp	5.53%	5.87%
	60-70%	-24bp	5.54%	5.91%
	70-80%	-21bp	5.57%	5.95%
	80-90%	-21bp	5.84%	6.30%
Four years	<60%	-20bp	5.63%	5.87%
	60-70%	-23bp	5.64%	5.90%
	70-80%	-20bp	5.67%	5.95%
	80-90%	-20bp	5.94%	6.28%
Five years	<60%	-19bp	5.73%	5.89%
	60-70%	-22bp	5.74%	5.92%
	70-80%	-19bp	5.77%	5.96%
	80-90%	-20bp	6.03%	6.29%

Adelaide Bank dropped rates for owner-occupiers by up to 65 basis points

Finally, Adelaide Bank made notable cuts to its fixed home loan offerings this week.

It put forward this week's biggest drop, at 65 basis points, on its SmartSaver and SmartFix products for those who fix their rate for one or two years.

The bank's SmartSaver product doesn't charge monthly fees, while its SmartFix product comes with an offset account and charges a $15 monthly fee.

It's new rates for owner-occupiers making principal and interest repayments are as follows:

Fixed Period	Product	Change	New Rate (p.a.)	Comparison Rate* (p.a.)
One year	SmartSaver	-35bp	5.94%	6.21%
	SmartFix	-35bp	5.94%	6.38%
Two years	SmartSaver	-65bp	5.64%	6.29%
	SmartFix	-65bp	5.64%	6.13%

Other movers

• Australian Military Bank drops fixed rates for owner-occupiers and investors by up to 35 basis points
• Newcastle Permanent lowers fixed rates for owner-occupiers and investors by up to 30 basis points
• Northern Inland Credit Union cut fixed rates for owner-occupiers and investors by up to 20 basis points
• BankVic lowered rates on its offset home loans for owner-occupiers and investors by up to 20 basis points

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