Home loan rates have dropped to a record low of 1.59 per cent, a further 0.2 per cent below the latest recorded two-year rate.
Greater Bank has cut its one- and two-year fixed home loan rates to 1.59 per cent for New South Wales, Queensland and the ACT.
Greater Bank previously had a one-year fixed mortgage rate of 1.69 per cent and a two-year rate of 1.79 per cent. It’s 1.69 per cent one-year rate was already the lowest available.
To qualify for the discounted revert rate, customers must be new to the bank, with a loan size of $150,000 or more and a loan-to-value ratio (LVR) below 90 per cent.
The move follows on the heels of recent cuts to two-year fixed rates by other Australian banks, such as St George, Bank of Melbourne and AMP.
RateCity research director Sally Tindall explained longer-term fixed rates were on the rise, with banks forced to compete to maintain the lowest short-term fixed rate.
“Greater Bank has thrown down the gauntlet to its competitors, dropping to a new record low,” Ms Tindall said.
“Governor Philip Lowe’s insistence the cash rate will not rise until at least 2024 has given lenders the assurance they need to keep their short-term fixed rates ultra-competitive.
“Last month St George and Bank of Melbourne put pressure on the low-cost lenders by cutting their two-year fixed rates down to just 1.79 per cent, previously the lowest rate in this category.”
Ms Tindall went on to note while most bank’s revert rates were significantly higher, the Greater Bank fixed rates revert to 2.19 per cent for new customers.
“This might be the lowest mortgage rate in Australia’s history, but before you jump in, make sure it suits your finances,” she said.
However, it comes soon after NAB chose to hike their fixed rates by up to 0.3 per cent for terms of three years or more.
This is the second time NAB has hiked its three- and four-year fixed rates in the last three months. Despite the hikes, NAB still has one rate under 2 per cent – its two-year fixed rate at 1.99 per cent.
NAB’s new lowest three-year fixed rate is 2.18 per cent, while the lowest on the market rates from UBank and ING are 1.85 per cent and 1.89 per cent respectively.