After the Reserve Bank of Australia reduced the cash rate by 25 basis points recently, Australian consumers are now seeing banks fighting to offer the best deals available in the marketplace to attract new customers as well as first home buyers.
The central bank has confirmed that the economic pace has been much slower recently, hence their timing for reducing the cash rate.
While the main Australian banks reduced their standard variable rate by 25 basis points quite soon after the cash rate was reduced, the banks are now preparing to battle against each other to see which discounts and fixed rates can be seen as the best in the marketplace.
Check the Best Rates with Your Local Mortgage Broker
Your mortgage brokers in Rockingham will have up-to-date information to show which lenders are offering the best deals that are appropriate for your personal application. For example Westpac added an additional set of rate reductions offering a 4.79% deal as a one-year fixed-rate, but as with most mortgage deals, there are specific requirements to be met. In this case the rate is only available for mortgages above $150,000 and you must be a new borrower.
This competitive move was reflected in 1 to 5 year fixed rates being set below 5% at both the Bank of Melbourne and St George.
Westpac suggested that these lower rates will bring more confidence to homebuyers which includes people who are new to this sector of the marketplace and those who are looking at changing to a better deal with a different mortgage company. As the banks are able to fund a lower cost because of the cash rate reduction, they can offer better deals and still maintain their margins.
Should You Fix Your Mortgage Deal Now?
It’s very difficult for borrowers to know whether they should lock into a deal now or wait and see if more rate cuts are to follow in the near future.
The deals are proving that the banks have plenty of activity in the mortgage market. For example, St George has seen fixed-rate loans as 30% of their business whereas it used to be 10% before the mortgage rate was reduced.
Some banks have been offering cuts in their rate independent of the Reserve Bank of Australia’s changes which has seen 18.45% of people fixing their home loan finance, which is the most of the past five years, with the majority still choosing a standard variable rate, often with a discount for an initial period.
Only by meeting with your local mortgage brokers in Rockingham can you talk through the advantages and disadvantages of each of the mortgage deals that are available to you. Only after you are armed with the information can you make a decision about which deal suits you and your family.