The last 4-year fixed rate below 2% disappears

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Today, the last four-year fixed mortgage rate of less than 2% was raised, marking the end of ultra-low long-term fixed rates in Australia.

At the start of the year, there were 32 four-year fixed rates below 2%, including three of the Big Four banks.

BankVic was the last lender to stand firm, but today that rate is expected to drop from 1.95% to 2.29%.

While the vast majority of lenders are increasing 4 and 5 year fixed rates, there is still a lot of heat in the variable and short term fixed rate market, with some lenders further reducing their rates in these particularly variable categories.

Rate changes in the last two months on the RateCity.com.au database (April 1 to June 1, 2020):

  • VARIABLE: 31 lenders have lowered at least one variable rate, 8 have increased
  • 2 YEARS FIXED: 27 lenders cut, 8 increased
  • 3 YEARS FIXED: 15 lenders cut, 11 increased
  • 4 YEARS FIXED: 1 lender cut, 28 increased
  • 5 YEARS FIXED: 4 lenders cut, 25 increased

Analysis from RateCity.com.au shows that there are 189 mortgage rates below 2%, an increase of 57 since the start of the year and the highest number ever recorded in the RateCity database. com.au.

Number of mortgage rates below 2%

Pre COVID, 1 March 20 1-Jan-21 Today, 1 June 21 Current lowest rate
1 year fixed 0 24 36

* LOW RECORD * 1.67%

2 years fixed 0 30 78

1.78%

3 years fixed 0 28 52

1.79%

4 years fixed 0 32 0

2.04%

5 years fixed 0 3 0

2.24%

Variable 0 15 23

* LOW RECORD * 1.77%

Total 0 132 189

Source: RateCity.com.au. Rates include homeowner and investor loans. Some lenders offer multiple rates below 2%.

RateCity.com.au’s research director Sally Tindall said the field is tightening as some lenders withdraw record rates, while others cut rates to become more competitive.

“A number of record high rates have been relegated to the history books over the past two months as lenders have pulled some of the lowest rates off the table,” she said.

“There are now only two rates that are still at record levels – reducing the variable mortgage rate to 1.77% and the 1-year fixed rate from the BCU to 1.67%. All other lower rates have been increased.

“We expect more fixed rates to rise after the RBA’s term financing facility ends at the end of this month and we are getting closer to the next spot rate hike.

“Having said that, there is still a lot of competition in the market. There are 189 mortgage rates below 2% in our database, the highest in our records. Mortgage holders are still spoiled for choice, ”she said.

The Big Four Banks’ Lowest Rates for Homeowner Home Loans

ABC Westpac ANZ NAB
1 year fixed

2.09%

1.99%

2.04%

2.09%

2 years fixed

1.94%

1.79%

2.04%

1.89%

3 years fixed

2.19%

1.88%

2.04%

1.98%

4 years fixed

2.24%

2.19%

2.24%

2.19%

5 years fixed

2.99%

2.49%

2.24%

2.49%

Variable

2.69%

2.19% for 2 years then 2.69%

2.72%

2.69%

Source: RateCity.com.au. Note: Westpac rates are a loan to value ratio of up to 70%.

Lowest rates on RateCity.com.au database

Lender Rate
1 year fixed BCU

1.67%

2 years fixed BCU

1.78%

3 years fixed Credit Union SA

1.79%

4 years fixed Hume Bank

2.04%

5 years fixed ANZ / UBank

2.24%

Variable Reduce home loans

1.77%

RateCity.com.au. The rates are for homeowners who pay principal and interest. Certain LVR requirements apply.


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