Banks ‘shut door’ on record low rates

Long-term, ultra-low fixed interest rates may soon be a thing of the past, with two more banks hiking them.

Two Australian banks have decided to push up interest rates on a number of fixed-term home loans and experts say more hikes will follow.

NAB and Macquarie Bank have hiked both four- and five-year rates on fixed-term home loan products, following similar moves by major rivals Westpac and Commonwealth Bank.

NAB upped its four-year owner-occupier fixed-term loan by 21 basis points to 2.19 per cent, while its five-year fixed rate jumped 25 basis points to 2.49 per cent.

Macquarie Bank also hiked its four- and five-year fixed term rates by up to 30 basis points.

A four-year fixed rate at Macquarie Bank with a loan to value ratio of 70 per cent or less now garners a rate of 2.69 per cent while its five-year fixed term product attracts a rate of 2.79 per cent.

However, the bank dropped its standard variable rate by 15 basis points to 2.34 per cent.

ING, BankVic and Illawarra Credit Union are now the only three lenders offering four-year fixed rates under 2 per cent.

“At the start of the year, 25 lenders were offering at least one four-year fixed rate under 2 per cent. Now there’s just three, and they’re probably not going to keep these rates long,” RateCity research director Sally Tindall said.

“Banks are shutting the door on record low four- and five-year rates.

“Three-year rates are likely to be next, potentially in the second half of this year.”

The Reserve Bank expects the official cash rate to remain at 0.1 per cent until at least 2024.

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