There were no surprises in the RBA’s decision to hold the cash rate at 4.35% on Tuesday.

But analysts broadly agreed the tone of RBA governor Michele Bullock was slightly less hawkish than it was in February.

Some got a little excited at the wording of the board’s official announcement where the phrases “a further increase in interest rates cannot be ruled out” and “will do what is necessary to achieve that outcome” were removed.

Inflation still the enemy

Ms Bullock has been steadfast in saying core inflation needs to be in the target range of 2-3% and the path of interest rate movements to ensure that "remains uncertain", as does the timeframe.

She largely stuck to the script from the last meeting, saying the RBA board would continue to monitor the data and would not rule anything in or out.

Economists and market watchers are generally sticking with their forecasts that the next rate movement will be downward, sometime in the second half of the year.

Surely, home lenders weren’t waiting on anything more to come from the March board meeting – or could it be they’d acted earlier to get their new rates onto the market before all the fuss?

Let’s check how the two lenders who shifted interest rates this week responded.

Horizon Bank lives up to its name

The customer-owned bank hailing from the New South Wales south coast does indeed appear to be looking over the horizon, cutting both its fixed and variable rates this week.

Dropping fixed rates has been the flavour of the past few months; after all, who’s keen to be locked into a mortgage rate on the precipice of a downcycle?

But Horizon Bank has also cut its Home Sweet Home Introductory variable rates for principal and interest (P&I) and interest only (IO) owner occupier and investment home loans by 15 basis points.

The new rates for owner occupier loans are as follows:

Product name LVR Rate change New rate Comparison rate*
Home Sweet Introductory Variable IO  ≤70% -15 bp 6.29% p.a. 6.82% p.a.*
Home Sweet Introductory Variable IO  >70% -15 pb 6.44% p.a. 6.97% p.a.*
Home Sweet Introductory Variable P&I ≤70% -15 bp 6.09% p.a. 6.63% p.a.*
Home Sweet Introductory Variable P&I >70% -15 bp 6.24% p.a. 6.77% p.a.*

Not surprisingly, Horizon’s fixed rates have fallen a little further with a 25-basis point cut across a range of owner occupier and investment loans.

Here are some of the new fixed rate offers for owner occupiers:

Product name LVR Rate change New rate Comparison rate*
Fixed Rate Home Loan 1 year ≤70% -25 bp 5.89% p.a. 6.64% p.a.*
Fixed Rate Home Loan 2 years ≤70% -25 bp 5.79% p.a. 6.57% p.a.*
Fixed Rate Home Loan 1 year >70% -25 bp 6.04% p.a. 6.79% p.a.*
Fixed Rate Home Loan 2 years >70% -25 bp  5.94% p.a. 6.71% p.a.*

Credit Union SA investor packages heading north

South Australia’s third largest credit union Credit Union SA has increased the rates on its Investment Variable Home Loan Package Special Offer.

Interest only loans have gone up 25 basis points while principal and interest loans have been hiked 10 basis points.

The new rates are as follows:

Product name LVR Rate change New rate Comparison rate*
Variable Home Loan Package Special Offer P&I Investment ≤80% +10 bp 6.29% p.a. 6.66% p.a.*
Variable Home Loan Package Special Officer IO Investment ≤80% +25 bp 6.49% p.a. 6.88% p.a.*

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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.

Update resultsUpdate
Filters
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
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90%
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5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
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6.09% p.a.
6.11% p.a.
$2,421
Principal & Interest
Variable
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$250
60%
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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

Image by Pat Whelan on Unsplash



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