Fixed Rates Chopped
With demand for housing loans continuing to sag, some 16 lenders have dropped the interest rates on their three-year fixed rate home loans. The lenders cut by an average of 13 basis points, taking the average three-year fixed rate to 6.01 per cent, according to RateCity. “Fixed home loan rates are usually a good indicator of the direction interest rates will move, because lenders set their fixed rates based on their projected estimate of rate movements,” said RateCity spokeswoman Michelle Hutchison.
“What this means is if fixed rates are dropping, then it’s likely that lenders expect variable rates to fall further.” ANZ bank has cut its three-year fixed interest rate home loan by 20 basis points to 5.94 per cent. Ms Hutchison says lenders are competing harder to attract new home loan customers and, by lowering their rates, are hoping to lock them in.