Lenders battle for market share amid record refinancing

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However, the central bank must first see the annual inflation rate rise to its target range of 2-3%. This would require a drop in the unemployment rate and a rise in wages.

Closures in Sydney and Melbourne have pushed the prospects of meeting those terms – and the start of an interest rate hike – further.

The RBA has repeatedly stated that it is unlikely to start raising official rates until 2024, at the earliest.

The battlefront for lenders has shifted from fixed rate mortgages to variable rate mortgages Credit:iStockPhoto

Mortgage lenders have increased their long-term fixed rates since March, as they prepared for the June 30 end of the cheap COVID-19-induced financing provided to them by the RBA.

More recently, they have started to increase their fixed rates at 1 and 2 years; although there are still good deals on 1-year fixed rates, and in particular on 2-year fixed rates.

The majority of fares below 2 percent listed in RateCity’s database are fixed. However, the number of variable rate mortgages below 2% continues to grow.

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Before the RBA’s latest rate cut, there were only a handful of floating rates below 2%. However, there are now 48 variable rate mortgages listed in the RateCity database that are less than 2 percent. Most of these rates are only available to new customers.

Sally Tindall, research director at RateCity, says the recent variable rate cuts are long overdue.

“After the last two drops in cash rates, variable rates barely budged as most lenders chose to lower fixed rates [instead],” she says.

Anyone who has a good repayment record, a secure job, and has built up equity in their home – unless they’re already on a very low rate – should be in a good position to negotiate a better deal with their current lender. on his mortgage. If they don’t come to the party, many cheaper fares are offered by competitors.

  • The advice given in this article is general in nature and is not intended to influence readers’ decisions regarding investments or financial products. They should always seek their own professional advice that takes their personal circumstances into account before making any financial decisions.


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