Named: Every bank that’s slashed rates to under 5pc

Number of lenders with a home loan under 5pc. Source: Canstar.

Eighteen Australian lenders have slashed interest rates below 5 per cent ahead of the Reserve Bank’s big move on Tuesday.

Comparison firm Canstar’s database showed 18 lenders had at least one fixed rate sitting under 5 per cent now, and one also had a variable rate at that level – Police Credit Union.

The moves by the 18 banks preempted The RBA’s decision to cut rates at its August meeting, with Reserve Bank Governor Michele Bullock announcing a 0.25 per cent reduction to push Australia’s official cash rate down from 3.85 per cent to 3.6 per cent.

The decision on Tuesday to cut rates followed the RBA’s shock call to hold at its July meeting last month.

The list of lenders below is based on personal home loans for any loan amount, any LVR, and both principal & interest and interest only payments, and excludes introductory, green only and first home buyer only home loans.

Lenders with lowest fixed rates under 5 per cent:

Rank
Lender
Lowest advertised rate
Term

1
BOQ
4.89%
2 years

2
Greater Bank
4.94%
3 years

3
The Mutual Bank
4.94%
3 years

4
Easy Street Fin Services
4.95%
2 years

5
Regional Australia Bank
4.98%
2 years

6
BankVic
4.98%
3 years

7
Pacific Mortgage Group
4.99%
2 years

8
Hume Group
4.99%
3 years

9
Macquarie Group
4.99%
2 years

10
Police Bank
4.99%
3 years

Rank
Lender
Lowest advertised rate
Term

11
GMCU
4.99%
2 years

12
Australian Mutual Bank
4.99%
3 years

13
Community First Bank
4.99%
3 years

14
Queensland Country Bank
4.99%
3 years

15
ME Bank
4.99%
2 years

16
Police Credit Union
4.99%
3 years

17
Summerland Bank
4.99%
2 years

18
Bank of China
4.99%
1 year

SOURCE: Canstar.com.au

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Canstar data insights director Sally Tindall said Bank Australia is currently offering a lowest fixed rate of 4.59 per cent for 3 years, but it was strictly for new builds with a NatHERS 7.5 star rating or higher​, all electric and rooftop solar, and the home must have been built within the last 18 months.

“The question is, which bank will be next to trump them, in a bidding war that’s slowly but surely pushing fixed rates south,” Mr Tindall said. “Fixed rates starting with a ‘4’ are now a firm fixture in the lowest rate tables with 18 lenders now in the under 5 per cent club.”

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Canstar data insights director Sally Tindall. Picture: Tim Hunter.

She said now the Reserve Bank has cut again, “owner-occupiers paying down their debt should not be on a rate that’s over 5.50 per cent”.

“In fact, if the majority of banks pass the cut on in full, which they should absolutely do, then there should be over 30 lenders offering at least one variable rate under 5.25 per cent, while CBA and Westpac’s lowest rates could hit 5.34 per cent.”

Now the RBA has cut the cash rate to 3.60 per cent, an owner-occupier with a $600,000 debt today, and 25 years remaining on their loan, could see their monthly repayments drop by $90, assuming the banks pass it on in full to existing variable rate borrowers, Ms Tindall said.

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Potential impact of an August RBA cash rate cut. Source: Canstar.

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