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Adelaide Bank cuts rates for broker offerings

adelaide bank ta

adelaide bank ta
Reporter 2 minute read

The non-major has announced fixed rate mortgage cuts of up to 30bps across its owner-occupied and investment loans offered through the broker channel.

Effective from 2 May, Adelaide Bank has dropped its residential fixed rates for its SmartFix and SmartSaver mortgage products.

For owner-occupiers:

  • SmartFix principal and interest rates have been reduced buy up to 20 basis points, with rates now starting from 3.74 per cent
  • SmartFix interest-only rates have been reduced buy up to 20bps, with rates now starting from 4.24 per cent
  • SmartSaver principal and interest rates have been reduced by up to 20bps, with rates now starting from 3.64 per cent
  • SmartSaver interest-only rates have been reduced by up to 30bps, with rates now starting from 4.14 per cent

For investors:

  • SmartFix principal and interest rates have been reduced by up to 20bps, with rates now starting from 3.94 per cent
  • SmartFix interest-only rates have been reduced buy up to 20bps, with rates now starting from 4.24 per cent
  • SmartSaver principal and interest rates have been reduced by up to 30bps, with rates now starting from 3.84 per cent
  • SmartSaver interest-only rates have been reduced by up to 30bps, with rates now starting from 4.14 per cent

Adelaide Bank’s latest pricing changes follow fixed rate reductions of up to 92bps in March, which also applied to the lender’s third-party home loan offerings.

The non-major is among several lenders that have reduced rates across their fixed rate home loans 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.

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Lenders also 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.”

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[Related: Lenders change home loan rates]

 

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