It seems the banks are moving to cut fixed interest rate home loans. Last week ANZ cut their fixed rate loans by half a percentage point, and now HSBC Australia has announced it is cutting fixed rate loans by between 35 and 130 basis points, with the biggest cut going to their three-year fixed loans.
One-, two and three-year fixed rates were cut as were the four-, and five-year fixed rates.HSBC head of home loans John Lane said the fixed rates would offer relief from the increases in variable loans.
"Recent weeks have seen a significant reduction in the medium and long-term cost of fixed-rate funds in the commercial market,'' Mr Lane said today.
Mr Lane said yields had loosened as the market factored in the expectation the Reserve Bank of Australia (RBA) would cut official interest rates in the coming months.
Official interest rates are currently at a 12-year high and the commercial banks have passed on these rate rises to their customers. Many banks are refusing to commit to cutting rates even if the RBA cuts official rates next month, as is predicted.
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