The home loan rate war continued to heat up this week as the lowest variable rate in Australia dropped to 2.19 per cent – and experts predict the competition will only intensify.
The special from Reduce Home Loans is for owner-occupier variable customers with loans up to $850,000.
Analysis from RateCity.com.au shows that at the end of March just 19 lenders offered at least one fixed or variable rate of 2.5 per cent or below.
Almost three months later, with no additional cuts to the cash rate, this list has grown to 77 lenders.
RateCity.com.au Research Director Sally Tindall said lenders were willing to drop rates further to bring in new customers.
“Since the emergency RBA rate cut in March, we’ve seen the number of lenders offering rates of 2.5 per cent or less quadruple,” she said.
“The catch is these rates are largely reserved for new customers or home-owners willing to fix their rate.
“Australians are increasingly starting to realise they have to act on their mortgage if they want to save money.”
Ms Tindall said he latest ABS statistics show while the number of new home loans has started to fall, refinancing is on the rise, putting pressure on the banks to remain competitive.
“We expect this rate war to intensify, despite the fact mortgage rates are already at record lows,” she predicted.