 Banks lower home loan rates
Interest rates in Australia are now at the lowest level for half a century. But CommSec chief economist Craig James is warning that interest rates are at or near the bottom, with perhaps only one more 0.25 per cent cut to come.
However Mortgage Choice's Kristy Sheppard says the future of home loan rates is unsure.
Everyone is thinking rates will fall further and they want to take advantage of that," she said.
"The general consensus is that rates could fall to 2 or 2.5 per cent by the end of 2009." Fixed and variable mortgages are currently at around 5 per cent, which is a big drop from the 9 per cent or more that was common in 2008.
Monthly repayments on a $300,000 mortgage over 30 years have plummeted to about $1600, saving more than $800 a month compared to this time last year.
But if house prices fall, home owners could find themselves with little or no equity in their homes.
Most major banks cut mortgage rates again last week following the Reserve Bank's 25 basis point cut to official rates. However, the banks only passed on a saving of 10 basis points.
The Commonwealth Bank has a standard variable rate of 5.64 per cent. Westpac is at 5.81% and St George is at 5.79 per cent. ANZ offers 5.81 per cent. NAB did not cut home loan rates, except for broker-distributed Homeside products.
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