Three of Australia’s major banks have cut interest rates on fixed rate home loans, with some loan products now attracting a rate below 2%.
Commonwealth Bank, Westpac and NAB took a stab in lending rates following the Reserve Bank’s decision on Tuesday to cut the cash rate to 10 basis points to better support the Australian economy outside the recession induced by COVID-19.
In a statement released Wednesday morning, the CBA said its four-year fixed rate for homeowners would be cut by 100 basis points to 1.99% – the lowest fixed rate the bank has ever offered in 108 years of history.
Westpac also moved its fixed four-year owner-occupant rate to 1.99%.
The NAB announced on Wednesday afternoon that its fixed four-year owner-occupant rate would drop to 1.98%, the lowest rate ever offered by the financial institution.
The big bank also cut two- and three-year fixed rates on homeowner home loans by 15 basis points, both offering rates at 2.14%. One-year fixed rates are advertised at 2.19 percent.
Westpac changed the one-, two- and three-year fixed rates to 2.09 percent, while NAB’s one- to three-year fixed rates fell from 2.09 to 2.19 percent.
The CBA, Westpac and NAB have not changed the interest rate on variable rate mortgage loans.
It is understood that ANZ has yet to announce any rate changes following the RBA’s decision.
ABC retail banking chief Angus Sullivan said the decision to switch to fixed rates first was to give customers confidence that they could get a low interest rate for a certain amount of time. years.
“Yesterday’s RBA decision will reduce the interest rate structure and provide assurance that Australians can borrow long term at historically low rates,” Sullivan said.
“We reflected this in our interest rate settings, offering clients our lowest fixed rate ever – 1.99% fixed for four years – providing clients who repair all or part of their mortgage with certainty and confidence in the future. “
Rachel Slade, director of personal banking at NAB, said it was the sixth reduction in the cash rate in the past 18 months.
“With interest rates at record highs, we are doing what we can to support homebuyers and business owners through COVID-19, while balancing the impact on our deposit and deposit customers. savings, ”she said.
The CBA also reduced interest on business loans by 51 basis points under the federal government’s COVID-19 small business loan guarantee program.
A loan secured under the program now enjoys a rate of 2.99 percent, while an unsecured loan enjoys a rate of 3.99 percent.
The bank’s BetterBusiness loans have been slashed by 50 basis points with rates as low as 2.49 percent.
Westpac’s chief executive of business banking, Guil Lima, said the ability for small businesses to access cheap debt would be vital to supporting economic recovery.
“We have significantly reduced some loans to small businesses to support lending and growth, as part of our ongoing efforts to help small businesses during the pandemic,” Lima said.
Fixed rates for small business loans at Westpac are now 2.38 percent, while guaranteed variable rates are as low as 3.09 percent.