The non-major has announced rate reductions across its fixed home loan offerings ahead of the Reserve Bank’s next monetary policy board meeting.
BOQ has reduced its three-year fixed rate for owner-occupiers paying principal and interest by 20 bps, down from 4.29 per cent to 4.09 per cent.
The changes are effective for new home loan customers from 28 June, with the new offer also applying to inflight applications and switch requests.
BOQ has also announced a discount offer for eligible three-year owner-occupied P&I customers, which could see rates fall to as low as 2.99 per cent.
The new discount offer will apply for new lending over $300,000 with a loan-to-value ratio (LVR) of 80 per cent or lower.
Reflecting on BOQ’s announcement, comparison site Canstar’s finance analyst, Steve Mickenbecker, noted that the bank’s discount offer takes the recent wave of mortgagor rate cuts to a “new level”.
“We have seen Greater Bank come out with 2.99 per cent rates for one-year fixed loans, breaking the ground below 3 per cent, which a few years back I would never have imagined,” he said.
“UBank then also scratched below the surface with the same deal.”
Mr Mickenbecker continued: “BOQ has taken us to a new level again, extending the 2.99 per cent term to three years fixed. It offers a great opportunity to get off to a flying start paying off your loan.
“The 2.99 per cent rate for three years makes borrowing for a home more affordable again.”
BOQ is the latest lender to reduce its mortgage rates following the Reserve Bank of Australia’s (RBA) decision to cut the official cash rate for the first time in almost three years, slashing it to a new record low of 1.25 per cent.
The monetary policy adjustment triggered an immediate response from lenders, who passed on the 25bps rate cut either partly or in full via lower variable and fixed mortgage rates.
The RBA’s next monetary policy board meeting is scheduled for tomorrow (Tuesday, 2 July), with some economists expecting another cut, which would lower the cash rate to 1 per cent.
[Related: TMB drops variable mortgage rates]
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