The interest rate cuts you haven't heard about
There’s been plenty of talk in the past couple of months about the consecutive cuts that the Reserve bank has made to official interest rates, and the impact that these interest rate cuts have had on the Melbourne property market in general, and buyer confidence in particular.
But what many people haven’t realised yet is that there have been several more moves on the interest rate front this week, (without any involvement from the Reserve Bank), and these moves are likely to have further positive impact on the property market in coming months.
It hasn’t gained much media attention yet, but if you speak with your mortgage broker they will tell you that competition between lenders for new business has seen several Banks dropping rates this week.
In the latest move, the Commonwealth Bank announced during the week that it would cut its two, three and five-year fixed rate loans by between 0.2 and 0.8 percentage points, with cuts applying to both owner-occupiers and property investors. This move by the CBA comes hot on the heels of moves by Westpac, ANZ and the NAB, and several smaller lenders, to reduce their fixed interest rate loans this month.
The Commonwealth is believed to have reduced their two-year fixed rates for owner-occupiers by more than 0.6 percentage points to 3.18 per cent. Three-year fixed rate loans are believed to have fallen to 3.28 per cent, whilst their largest cut was to their five-year fixed rate loan for investors.
Earlier in the week the ANZ Bank announced a range of cuts to its fixed rate loans, with reductions ranging from 0.25 percentage points to 0.96 percentage points. The ANZ is now believed to be offering a four-year fixed rate loan for owner-occupiers at 3.53 per cent.
Whilst interest rate cuts like these are always good news for homebuyers, the fact that the Banks are cutting fixed rate deals is an even more positive sign for the overall market, as it confirms that their economists expect interest rates to remain at record lows for a substantial amount of time.
With so many factors currently working in favour of sellers in today’s market, (from interest rates and eased lending requirements to the shortage of available property for sale), it’s a great time to be launching a property into the market. If you’d like experienced advice and guidance to ensure you don’t miss the opportunity, feel free to call us at Barry Plant Moonee Valley on 9373 0000.