A wave of rate reductions has forced fixed rate home loans to their lowest level in over three years.
According to new research by RateCity, 46 lenders have dropped their three-year fixed home loan rates since July, including all four major banks: ANZ, Commonwealth Bank, NAB and Westpac.
Westpac was the latest to drop its three-year fixed rate, cutting 10 basis points from its interest rate.
Of the 46 lenders, the average rate cut was nine basis points, however eight lenders have cut their rates between 30 and 40 basis points.
RateCity spokesperson Michelle Hutchison said she expects more borrowers to take up fixed home loans this year.
“Three-year fixed home loans – the most popular fixed term among borrowers – are currently averaging 5.95 percent and borrowers can find deals starting from 5.53 per cent by LJ Hooker Finance. We haven’t seen three-year fixed rates this low in more than three years when we were hit by the GFC,” she said.
“Variable home loans are still the most popular choice among Australian borrowers, especially with interest rate drops this year making them more attractive. However, with fixed rates at a three-year low and uncertainty about which direction rates will move, we expect to see more borrowers taking up fixed home loans this mortgage season.”
Australian Bureau of Statistics (ABS) data analysed by RateCity, shows the percentage share of fixed home loans financed in June was 10.16 per cent – up from 6.93 per cent in June last year.