ANZ says rate cuts starting to have a positive impact: a guide to lowest standard and variable mortgage rates
Interest rate cuts are starting to have an impact on the household sector with the RBA unlikely to lower the cash rate further over the coming months, says ANZ in its latest Australian Weekly Economic report.
The report, edited by senior economist Riki Polygenis and Katie Dean, head of Australian economics, says the most recent economic data – last week’s building approvals figures and retail trade data - support the RBA’s growing confidence that interest-rate sensitive areas of the economy are responding to stimulatory monetary policy settings.
“In particular, improved consumer confidence appears to be translating into stronger consumer spending, with nominal retail sales growth robust in January and February following three consecutive monthly contractions in late 2012,” says ANZ.
ANZ says these ‘greenshoots’ suggest the RBA is a little more confident that it will not have to act on its easing bias over the next couple of months.
“That said, the RBA remains alert to uncertainties surrounding the transition towards non-mining sources of growth against a backdrop of a high Australian dollar, tight fiscal policy and weak credit growth.
“The next possible window for a rate cut is in June/July after the federal budget, but this will depend critically on how the labour market evolves and whether we see a turnaround in key leading indicators of non-mining investment (such as next week’s NAB survey data and the capital expenditure release in late May)," says ANZ.
The report notes a recent client survey, which found that activity in the residential housing market has improved with developers reporting increased levels of sales and inquiries.
“Residential construction activity has also picked-up, with firms in this sector anticipating an improvement in revenue growth over the second half of this year.
“In contrast, weak fundamentals in the commercial property sector (office and retail) continue to constrain investment in this sector. However, sales activity remains robust due to strong interest in prime retail and office assets, particularly from offshore investors.”
Currently the cheapest home loan rate appears to be a one year fixed-rate home loan of 4.69% offered by non-bank lender eMoney, though it does require a hefty 25% deposit.
Lowest variable rate offerings:
Provider | Loan name | Rate | Comparison rate* |
Loans.com.au | Blackboard special | 4.99% | 5.01% |
State Custodians | State Custodians Peak Performance Offset (Refinance Only) | 4.99% | 5.35% |
UBank | UHomeloan for refinancing | 5.12% | 5.12% |
Lowest one-year fixed-rate offerings
Provider | Loan name | Rate | Comparison rate* |
eMoney | Pro Pack 75 | 4.69% | 5.40% |
Quick Direct | Package one year fixed | 4.79% | 5.46% |
UBank | UHomeLoan for refinance fixed rate one year | 4.83% | 5.03% |
Lowest three-year fixed-rate offerings
Provider | Loan name | Rate | Comparison rate* |
ME Bank | Member Package SMHL Standard Home Loan | 4.99% | 5.49% |
Teachers Mutual Bank | Teachers Fixed Option Loan | 4.99% | 5.90% |
AMP | Select Package Residential Fixed 3 yrs 100k+ | 5.09% | 5.54% |
*A comparison rate includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure.
For information on refinancing, watch our free webinar The Do's and Don’ts of Refinancing Your Existing Home Loan ... and How to Avoid Unnecessary Hurdles.