Did you have a win on Melbourne Cup Day? You did if you’re a homeowner! The RBA declared a Cup Day cut to interest rates to an all-time low of 0.10 percent.
While we were all out celebrating Melbourne Cup day, ‘Twilight Payment’ was declared the winner (from what I can remember ?). On the same day, the RBA declared a Cup Day cut to interest rates to an all-time low of 0.10%. WOW! Kudos to all home owners – we were all winners! If you also had a win on Melbourne Cup Day, double cheers from us! ?
Why did the RBA lower rates?
Due to rising unemployment, the RBA is hopeful the new interest rate will have a strong ripple effect on everything from wages to the strength of the Australian dollar.
The RBA expects borrowers will take advantage of their home loan savings and start spending. The more money flowing into the economy, the more likely it is that the country will begin to recover.
As a property owner, if you are locked into a fixed rate loan, you will have to wait until the fixed rate period ends before you can take advantage of lower rates. For variable home loans there are some things that you can do such as checking if your lender is going to pass on the rate cut. If not, you may want to find another lender who will give you a better rate.
However, it’s interesting to note that some lenders – including the four major banks – have opted to not pass the rate cut on in full to variable customers, and instead have reduced their fixed rate loans.
Which lenders have dropped their rates?
Lenders are under no obligation to pass on the RBA’s cut, but for new borrowers, it is more than likely that many will.
Here is a list of some lenders on our panel who have dropped their rates:
CommBank
| Fixed HL OO (Owner Occupier) P&I on MAV package, effective from 11/11/2020 | ||
| Product | New rate change | New interest rate |
| 1 yr fixed | -0.10% | 2.19% |
| 2 and 3 yr fixed | -0.15% | 2.14% |
| 4 yr fixed | -1.00% | 1.99% |
Refinance rebate:
- $2k refinance rebate for OO and IHL (Investment Home Loan) applied before 31/12/2020 and settled by 31/03/2021
- Limit of one $2k cashback per borrowing entity and per customer over a 12-month period
- Loan size $250k min
- Eligible if refinanced from other financial institutions except for CBA or Bankwest
- Cashback paid within 2 weeks of settlement.
ANZ
| Fixed HL OO P&I, effective from 05/11/2020 | |||
| Product | New rate change | New interest rate | New rate w/breakfree |
| 1 yr fixed | -0.30% | 2.24% | 2.09% |
| 2 and 3 yr fixed | -0.20% | 2.24% | 2.09% |
| 4 and 5 yr fixed | -0.40% | 2.44% | 2.29% |
Refinance rebate:
- $1.2k refinance rebate for lending >$150k but <$250k
- $3k refinance rebate for lending >$250k
- Loan must be submitted from 9/09 – 31/05/2020 and drawn down by 22/01/2021 (extended from previous date of 31/11/2020).
NAB
| Fixed HL OO P&I, effective from 10/11/2020 | ||
| Product | New rate change | New interest rate |
| 1 yr fixed | -0.10% | 2.19% |
| 2 yr fixed | -0.10% | 2.09% |
| 3 yr fixed | -0.20% | 2.09% |
| 4 yr fixed | -0.81% | 1.98% |
Refinance rebate:
- $2k refinance rebate for loan size $250k min, drawdown must be between 7/09/2020 – 31/01/2021.
Westpac
| Fixed HL OO P&I, effective from 09/11/2020 | ||
| Product | New rate change | New interest rate |
| 1, 2 and 3 yr fixed | -0.20% | 2.09% |
| 4 yr fixed | -0.80% | 1.99% |
Refinance rebate:
- $2k refinance cashback per property for loan >$250k + $1k bonus for first application (max 80% LVR)
- For OO P&I and investment loans, max 80% LVR, packaged HL only
- Apply by 31/01/2021 settle by 31/03/2021
- Eligible if refinanced from other financial institutions except St George (StG), Westpac Banking Corporation (WBC), Bank of Melbourne (BOM), Bank of South Australia (BankSA), and RAMS
- Cashback will be paid into account within 60 days of settlement.
Macquarie
| Fixed HL OO P&I max 80% LVR, effective from 11/11/2020 | ||
| Product | New rate change | New interest rate |
| 1 and 2 yr fixed | -0.10% | 2.09% |
| 3 yr fixed | -0.10% | 2.19% |
| 4 and 5 yr fixed | -0.25% | 2.59% |
Refinance rebate:
- None available.
St George
| Fixed HL OO P&I on Advantage package, effective from 09/11/2020 | ||
| Product | New rate change | New interest rate |
| 1, 2 and 3 yr fixed | -0.20% | 2.09% |
| 4 yr fixed | -0.80% | 1.99% |
Refinance rebate:
- $4k refinance rebate (for new OO P&I and IHL)
- $2k refinance rebate per property refinanced (loan size $250k min) received between 1/04/2020 – 31/01/2021 and settled by 31/03/2021
- One-off $2k bonus cashback received between 18/09/2020 – 31/01/2021 and settled by 31/03/2021
- Eligible if refinanced from other financial institutions except StG , WBC, BOM, BankSA and RAMS
- Cashback paid within 60 days of settlement.
ING
| Fixed HL OO P&I, effective from 13/11/2020 | |||
| Product | New rate | New rate w/ Orange Adv, LVR > 80% | New rate w/ Orange Adv, max 80% LVR |
| 1 yr fixed | 2.39% | 2.29% | 2.19% |
| 2 yr fixed | 2.29% | 2.19% | 2.09% |
| 3 yr fixed | 2.24% | 2.14% | 2.04% |
| 4 yr fixed | 2.19% | 2.09% | 1.99% |
| 5 yr fixed | 2.39% | 2.29% | 2.19% |
Refinance rebate:
- None available.
Bankwest
| Fixed HL OO P&I max 80% LVR, effective from 12/11/2020 | |
| Product | New interest rate |
| 1 yr fixed | 2.14% |
| 2 and 3 yr fixed | 2.07% |
| 4 yr fixed | 1.99% |
Refinance rebate:
- $2k refinance cashback for loans >$250k, OO and IHL max 80% LVR
- Application must be submitted from 12/11/2020 and settled by 30/04/2021
- 5 payment runs depending on when the loan settles.
BOQ (Bank of Queensland)
| Fixed HL OO P&I max 80% LVR, effective from 19/11/2020 | |
| Product | New interest rate |
| 2 and 3 yr fixed | 2.09% |
| 4 yr fixed | 1.99% |
Refinance rebate:
- $3k refinance cashback for loans >$250k, OO and IHL max 80% LVR
- Application must be submitted from 19/12/2020 and settled by 28/02/2021
Our approach
We are happy to approach your lender for you and ask them to drop your rate. If they refuse, we will research other lenders that will not only suit your circumstances but also give you a better rate than you’re getting now.
In fact, with the cash rate being so low, it may be worthwhile getting a fixed rate loan for the next 3 years. The RBA reports that it intends to keep interest rates at 0.10% for the next three years at least.
Please note that we are no longer taking any applications that have to settle before Christmas, as we cannot guarantee turnaround times at this time of year.
In saying that, if you have any queries whatsoever about your home loans, feel free to contact us anytime, we are happy to help.
