On Thursday morning, US inflation data came in hotter than expected for March, sending global markets aflutter.
US inflation hit an annual rate of 3.5% in March, up from 3.2% in February, and higher than analysts were expecting.
As the old saying goes, when the US market sneezes, the rest of the world catches a cold.
This also comes as a blow to those waiting for the Reserve Bank of Australia to lower the cash rate, which had been widely tipped for late this year.
With US financial markets now deciding all bets are off for a possible interest rate cut by the US Fed in June, some Australian analysts are now tipping there will be no drop in the RBA cash rate in 2024.
But that may be a little kneejerk – none of the big four Australian banks have shifted their forecasts of a cut in the cash rate in either September or November.
With that in mind, let’s get back to the local home loan market to check what else happened to rates this week.
GMCU makes big moves
Goulburn Murray Credit Union is not pussyfooting around with rate cuts, dropping its Standard Variable Plus new home loan rates to 6.19% p.a. for owner occupiers and 6.39% p.a. for investors.
It puts GMCU’s investor rate near the lowest on the market for variable investment loans, with the credit union slashing a headline-grabbing 2.05% off the old rate.
Both loans are for loan-to-value ratios (LVR) up to 95%, as below:
| Loan product | Rate change | LVR | New rate | Comparison rate* |
| Standard Variable | -1.81% | ≤95% | 6.19% p.a. | 6.35% p.a. |
| Investment Standard Variable | -2.05% | ≤95% | 6.39% p.a. |
7.94% p.a. |
This follows moves the credit union made last week.
Unloan debuts 5.99% new home loans
Even a 2 percentage point lopping was not quite enough to better the maiden new home loan offerings of Unloan, CommBank's digital only lender, which until this week was only offering refinancing loans.
Unloan's Variable Rate Home Loan hit the market at a competitive 5.99% p.a. for owner occupiers (5.90% p.a. comparison rate*) and 6.29% p.a. (6.20% p.a. comparison rate*) for investors.
Both loans feature a unique rolling interest rate discount of one basis point per year - or 30 basis points over the life of a 30-year loan - and come with no fees.
Auswide Bank drops Basic Loan rates
The regional Queensland based bank has cut rates by up to 20 basis points on its new Basic variable Home Loan and Basic variable Investment Loans.
Auswide’s best new rate is 6.19% p.a. (6.22% p.a. comparison rate*) on a new Basic owner occupier principal and interest (P&I) home loan with a LVR 70-80%.
Auswide Bank’s Freedom Package home loans have also undergone some tweaking this week with most variable rates falling for new owner occupier and investment P&I and interest only (IO) loans.
The new Freedom Package variable rate for a new owner occupier LVR 70-80% loan is 6.39% p.a. (6.74% p.a. comparison rate*).
Other movers this week
Tiimely, the lender formerly known as Tic:Toc (you can see the issue there), has dropped rates by 10 basis point for its Live-In Variable and one-year Fixed IO and P&I investment loans.
Meanwhile, New Zealand-based Sovereign dropped fixed interest rates this week for its two-year and five-year Go Home Loans.
It’s likely to attract little attention though with new Australian Bureau of Statistics data this week showing fixed rate home lending by value in Australia fell to a new low of 1.44% in February.
Mutual banks up variable rates
Finally, going the other way on variable home loan rates this week were the banks under the Teachers Mutual Bank umbrella.
These include UniBank, Firefighters Mutual Bank, and Health Professionals Bank that have all raised rates on a range of variable new mortgages by 10 basis points.
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.99% p.a. | 5.90% p.a. | $2,396 | Principal & Interest | Variable | $0 | $0 | 80% | Featured Apply In Minutes |
| |||||||||
5.94% p.a. | 5.95% p.a. | $2,383 | Principal & Interest | Variable | $0 | $0 | 90% | No hidden feesFree redraw facility | ||||||||||
6.19% p.a. | 6.35% p.a. | $2,447 | Principal & Interest | Variable | $0 | $140 | 80% | |||||||||||
6.24% p.a. | 6.30% p.a. | $2,460 | Principal & Interest | Variable | $0 | $1,100 | 80% | |||||||||||
6.24% p.a. | 6.30% p.a. | $2,460 | Principal & Interest | Variable | $0 | $1,100 | 80% | |||||||||||
6.24% p.a. | 6.30% p.a. | $2,460 | Principal & Interest | Variable | $0 | $1,100 | 80% |
Image by krackenimages on Unsplash
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