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TMB joins fixed rate cutting frenzy

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Charbel Kadib 3 minute read

The mutual banking group has announced fixed rate cuts of up to 34 basis points across its owner-occupied and investments home loans.

Teachers Mutual Bank (TMB) and its subsidiaries (Firefighters Mutual Bank, UniBank and Health Professionals Bank) have dropped their fixed home loan rates for the second time in two months.

The changes, effective for new business from 26 April, are as follows:

  • one-year owner-occupied principal and interest fixed rates have been cut by 22 basis points to 3.65 per cent (5.07 per cent comparison rate)
  • two-year owner-occupied principal and interest fixed rates have been cut by 23 basis points to 3.65 per cent (4.93 per cent comparison rate)
  • three-year owner-occupied principal and interest fixed rates have been cut by 23 basis points to 3.65 per cent (4.81 per cent comparison rate)
  • one-year investment principal and interest fixed rates have been cut by 15 basis points to 3.89 per cent (5.09 per cent comparison rate)
  • two-year investment principal and interest fixed rates have been cut by 20 basis points to 3.93 per cent (4.98 per cent comparison rate)
  • three-year investment principal and interest fixed rates have been cut by 34 basis points to 3.65 per cent (4.81 per cent comparison rate)

TMB’s latest fixed rate changes follow cuts of up to 50bps across both owner-occupied and investment home loan products in March.

TMB is the latest lender to drop its fixed mortgage rates, with INGNAB, Virgin MoneyHeritage BankWestpac, the Commonwealth Bank and Bendigo Bank also announcing reductions of up to 40bps over the past few weeks.

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Macquarie Bank, ME, HomeStart Finance and Adelaide Bank have also reduced their fixed rates by up to 92bps over the past few months. 

According to Steve Mickenbecker, finance analyst at comparison website Canstar, the changes have come off the back of easing funding cost pressures.

“With the significant fall in wholesale funding costs since the start of 2019, lenders have had the opportunity to invest the fattening margin in acquiring new business,” he said.

Several lenders hiked their variable mortgage rates throughout 2018 and earlier this year in response to such cost pressures.

The out-of-cycle rates changes have come despite monetary policy inertia from the Reserve Bank of Australia (RBA).

However, some analysts, including AMP chief economist Shane Oliver and managing director of Market Economics Stephen Koukoulas, expect the RBA to drop the cash rate as early as next month amid new ABS data reporting flat inflation growth.  

“We have been looking for two rate cuts this year since last December and had thought that the RBA would wait till after the election before starting to move,” Mr Oliver said.

“However, with underlying inflation coming in much weaker than expected, our base case is now that the first cut will come next month, with the RBA likely to conclude that it’s too risky to wait until unemployment starts to trend up.”

[Related: Fixed rate demand slips ahead of rate cuts]

TMB joins fixed rate cutting frenzy
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Charbel Kadib

Charbel Kadib

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

Before joining Momentum Media as a journalist in 2017, Charbel held roles with public relations agency Fifty Acres, and the Department of Communications and the Arts. 

Email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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