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‘Aggressive’ rate cut frenzy ensues as sentiment flips

bankwest  bankwest
Charbel Kadib 8 minute read

Bankwest is the only lender to announce a rate hike amid a flurry of cuts from several lenders, including a major bank.

NAB, BOQ, BankSA and Greater Bank are the latest lenders to drop their fixed mortgage rates following a move from ING earlier this week.


NAB has reduced its two-year standard owner-occupied P&I fixed rate on its NAB Tailored Home Loan (Choice Package) by 20 basis points to 3.59 per cent (4.93 per cent comparison rate).


The big four bank has also cut its two-year first home buyer fixed rate by 20 basis points, down from 3.69 per cent to 3.49 per cent.

Both changes are effective for new business form 30 May.


BOQ Group has also announced a number of fixed-rate cuts across its BOQ, Virgin Money and BOQ Specialist (BOQS) brands.

The changes, which will apply to both owner-occupier and investor home loans, will take effect from Friday, 31 May.


At BOQ and Virgin Money:

  • Two-year owner-occupied P&I fixed rates have been cut to 3.44 per cent, representing a 15bps decrease for BOQ and a 31bps decrease for Virgin Money.
  • Three-year owner-occupied P&I fixed rate have been cut to 3.39 per cent, representing a 30bps decrease for both BOQ and Virgin Money.

BOQ and Virgin Money have also cut their two and three-year investment P&I and interest-only rates by up to 30bps, with investment home loan rates now starting from 3.69 per cent.  

BOQ Specialist is also reducing one, two, three and five-year fixed rates for owner-occupied P&I on new borrowings of $500,000 or more.

Commenting on the changes, Lyn McGrath, group executive of retail banking said: “Our fixed rates are some of the most competitive in the market right now and a great option for people looking to lock in some certainty.

“The BOQ Group has a range of fixed rate home loan options designed to appeal to a broad range of customers, through our BOQ, Virgin Money or BOQ Specialist home loans.

“We want to partner with customers to realise their home ownership dreams – whether that’s purchasing their first home or expanding their property portfolio.”

According to rate comparison site Canstar’s finance analyst, Steve Mickenbecker, BOQ’s changes are part of an “aggressive” strategy to reverse its negative mortgage portfolio growth.

“The move is an aggressive pricing play to kickstart growth in the BOQ loan book,” he said.


BankSA has announced rate changes across its owner-occupied and investor fixed home loan rates, effective from Wednesday, 29 May.

For its owner-occupied standard fixed rate mortgages, the changes are as follows:

  • Two-year principal and interest fixed mortgage rates have been cut by 15bps, from 3.89 per cent to 3.74 per cent (5.21 per cent comparison rate)
  • Three-year principal and interest fixed mortgage rates have been cut by 16bps, from 4.00 per cent to 3.84 per cent (5.11 per cent comparison rate)

For its residential investment standard fixed rate mortgages, the changes are as follows:

  • Two-year principal and interest fixed rates have been cut by 5bps, from 4.09 per cent to 4.04 per cent (5.72 per cent comparison rate)
  • Three-year principal and interest fixed rates have been cut by 20bps, from 4.34 per cent to 4.14 per cent (5.59 per cent comparison ate)
  • Three-year interest-only fixed rates have been cut by 25bps, from 4.69 per cent to 4.44 per cent (6.06 per cent comparison rate)

BankSA has also dropped fixed rates on its portfolio loan by 25bps, from 4.69 per cent to 4.44 per cent.

Greater Bank

Greater Bank has announced it will slash its one-year owner-occupied P&I fixed rate home loan by 50bps to 2.99 per cent, making it the first lender to offer a rate below 3 per cent ahead of an expected cut to the official cash rate.

The lender has also dropped its two-year fixed rate to 3.39 per cent, while both the four and five-year fixed rates have also been cut to 3.64 per cent.

Greater Bank’s rate cuts take effect from Monday, 3 June.

NAB, BOQ Group, BankSA and Greater Bank are the latest lenders to cut their mortgage rates, amid easing funding cost pressures and expectations of a rate cut from the Reserve Bank of Australia (RBA).

Earlier this week, ING announced reductions of 16bps across its Orange Advantage and Mortgage Simplifier principal and interest variable home loans, effective from 30 May.

Canstar’s Mr Mickenbecker observed that the changes have come in response to easing funding costs and in anticipation of a rate cut from the RBA.

“Wholesale funding costs for lenders have fallen this year, giving lenders margin to invest in new loans, as the jockeying for market share continues,” he said.

“Lenders are getting ahead of the Reserve Bank, aggressively using fixed rate cuts to grow business.”

The analyst said that while fixed-rate reductions don’t alleviate repayment pressures for existing borrowers, an imminent monetary policy adjustment would flow through to variable home loan customers.

“An RBA cut should give existing variable-rate borrowers an opportunity to catch up part of the distance they have fallen off the pace.”

Bankwest bucks trend, hikes rates

Commonwealth Bank subsidiary Bankwest has bucked the rate-cutting trend, increasing its three-year owner-occupied P&I fixed rate to 3.64 per cent (4.43 per cent comparison rate), effective from Friday, 31 May.

In a statement to Mortgage Business, a Bankwest spokesperson said: “The decision has been taken in response to changing market conditions.”

[Related: ING cuts variable home loan rates]

‘Aggressive’ rate cut frenzy ensues as sentiment flips
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Charbel Kadib

Charbel Kadib

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

Before joining the team in 2017, Charbel completed internships 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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