Competition between Australia’s banks continues to heat up, with a number of lenders cutting their mortgage interest rates on both variable and fixed rate products.
Effective from today, Macquarie Bank will offer a first year discount on its Classic, Premium and Line of Credit loan categories – taking its variable rate to 5.85 per cent.
The discount off the standard variable rate will apply during the first 12 months of the loan and is applicable on all eligible applications settled on or before 28 September 2012.
Macquarie Bank's products are available through mortgage brokers or directly through the bank's own mortgage specialists.
Macquarie Adviser Services head of broker sales Doug Lee said the business was committed to ensuring a compelling offering for mortgage brokers and their clients.
“We firmly believe that choice is the key to a healthy market for borrowers, brokers and originators, and this new rate offer is all about choice, providing a compelling and very competitive pricing option,” Mr Lee said.
In addition to its first year discounts, Macquarie is currently offering free upfront valuations through its Online Valuation Ordering platform until 31 August 2012.
Earlier this month, Citibank cut their one and two year fixed rates by 10 basis points, down to 5.79 per cent p.a..
Citibank’s head of mortgages strategy, marketing and product Belen Lopez Denis said Citibank’s fixed rate products are now lower than the average standard variable rate – which is an unusual phenomenon.
“For those considering purchasing a house, it is a good idea to look at the fixed rate options. With so much market uncertainty, it might be worth considering fixing all or part of the mortgage,” she said.
“Citibank also offers a 60-day free rate lock so customers can cost-effectively guarantee the low fixed rate for 60 days after application.”
Citibank's move comes as enquiries for fixed interest rate mortgages flatline.
According to Ray White's mortgage brokerage Loan Market Group, customer enquiries for fixed rate mortgages had fallen to around 15 per cent of total home loan enquiries – down from 30 per cent earlier this year.
“The demand for fixed rate products has fallen as variables rates have basically intersected with fixed rates,” Loan Market spokesperson Paul Smith said.
“Fixed rate products had spent the majority of 2012 around a full percentage point below variable rates, however with a downward outlook on rates, lenders aren’t shifting fixed rates parallel to variable rates.
“The feedback from consumers shunning fixed rates is that they’re convinced home loan rates have further to drop and that they’re anticipating a period of prolonged low interest rates.”