Mortgage War: Big Banks cut Fixed Rate loans

The Big Banks are battling to win over new Home Loan customers on fixed rates of up to 5 years.

NAB and ANZ have slashed some fixed rate Home Loans by up to 50 basis points, following the lead of the other Big Banks in the past month.

NAB cut its 5-year fixed rate on owner-occupied principal & interest loans by 50 basis points, from 4.59% p.a. to 4.09% p.a. – which would save about $89 per month on a $300,000 30-year loan.

NAB also cut its 2- and 3-year fixed rates on investor interest-only loans by 30 basis points.

ANZ has cut 3- and 5-year fixed rates by 40 basis points on their investor interest-only Breakfree packages.

And a week earlier, CBA cut their 2-year fixed interest-only investor rate from 4.84% to 4.34% – another big drop of 50 basis points.

Westpac cut their 2-year fixed interest-only investor rate by 14 basis points, while smaller lenders such as ING, St George, Aussie Home Loans, Mortgage House and Virgin Money have also dropped some interest-only rates over the last month.

RateCity money editor Sally Tindall said the changes reflect the bank’s long-term outlook on the cash rate.

“The fixed rate war shows our big banks are not pricing in a rate hike anytime soon.

“The series of cuts show competition has returned to the investor interest-only space. After reaching their caps imposed by APRA the big banks are opening up their books again.

“This is good news for people in the market who are looking for the financial security fixed rates can bring.

“Five years without having to worry about a rate hike is the kind of peace of mind a lot of home hunters are looking for,” said Ms Tindall.

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