BREAKING NEWS: Interest rate shock, as data shows variable rates are now cheaper than fixed plans for the first time in years
- ANZ cut its standard convertible mortgage rate by 0.43 percentage points
Australia’s big banks are offering standard variable mortgage rates cheaper than fixed rates for the first time in more than two years.
The Commonwealth Bank and Westpac last week raised their fixed rates for the second time in weeks.
But in a sign of things to come, ANZ has cut the standard variable rate for borrowers with large mortgage deposits.
ANZ on Monday cut its Simplicity Plus home loan rate by 0.43 percentage points to 2.29 percent, making it cheaper than the bank’s three-year fixed rate of 2.39 percent.
Australia’s big banks are offering standard variable mortgage rates cheaper than fixed rates for the first time in more than two years. But in a sign of things to come, ANZ has cut the standard variable rate for borrowers with large mortgage deposits.
The lower rate will be available for borrowers with 30 per cent pledged deposits.
For the first time since June 2019, the lowest standard variable rate of the big four banks is below their average, three-year fixed rate for owner-occupiers paying principal and interest, a RateCity analysis showed.
Reserve Bank of Australia Governor Philip Lowe indicated last week that the cash rate could be raised from a record-low of 0.1 per cent in 2023 instead of 2024.
RateCity research director Sally Tindall said borrowers with standard variables instead of fixed rate mortgages would burn out when the Reserve Bank raised interest rates for the first time since November 2010.
“The problem with variable rates is that what goes down can also go up,” she said.
‘While the RBA has insisted that there will be no cash rate hikes next year, banks can still raise these rock-bottom variable rates at any time.’
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