More than 60 per cent of Australia’s lenders have now cut the interest on their respective fixed rate products, new research has revealed.
According to data from RateCity, more lenders moved fixed rates this month than during the last major month of rate changes in November 2010, when just over 50 per cent of lenders moved their fixed rates.
The largest movement in average rates has been in four-year fixed term home loans, which fell by 41 basis points.
By individual lender, the largest fixed rate drop this month was by Austral Mortgage, with a 116 basis point decrease to its three and four-year fixed rates.
Homeloans was not far behind, with a 105 basis point drop to some of its fixed rate home loans.
Three-year fixed rates are now as low as 6.39 per cent – 91 basis points below the average standard variable rate of 7.30 per cent.
RateCity’s chief executive officer Damian Smith said the movement in rates is unprecedented, but borrowers should look closely at the lifetime costs, not just those for the next few years.
“It’s great to see aggressive competition for fixed rate home loans in the market, with three-year fixed rates now below standard variable rates on average, and some as much as 91 basis points lower than the average standard variable rate,” he said.
“But while there are many borrowers who might benefit from locking in a fixed rate home loan now, mortgage holders need to remember a few key things to compare and calculate before taking the plunge.
“The first thing to be aware of is the “revert rate”. Break fees can also cost thousands of dollars if you wanted to switch your loan before the fixed term ends.”
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