Interest rates "are very low and have continued to edge lower over recent months as competition to lend has increased," the Reserve Bank of Australia noted yesterday in the statement after its monthly board meeting."Financial conditions remain very accommodative," the RBA said."Long-term interest rates and risk spreads remain very low. Markets still appear to be attaching a low probability to any rise in global interest rates or other adverse event over the period ahead.""Credit growth is moderate overall, but with a further pick-up in recent months in lending to investors in housing assets."One response of lenders at a time of low rates is to curb supply of the riskiest loans.RateCity product director Peter Arnold said the group's research found low-deposit home loans (those requiring savings of five per cent or less, relative to the value of a property value) now account for 69 per cent of the Australian market, down from 73 per cent in 2013.Spicing up product pricing is common, however, to maintain demand.Michelle Hutchison from Finder said yesterday that six lenders now offer cash-back deals of up to A$1000."These lenders include NAB, Austral Mortgage, Commonwealth Bank, Heritage Bank, homeloans.com.au and Newcastle Permanent," Hutchison said. "We also found 11 lenders offering waived fees for new home loan customers, including St George Bank, Resi and ING Direct."
Hutchison said: "we're still seeing home loan interest rate movements, with 94 fixed home loans that saw reduced rates by as much as 70 basis points over the past month, and 23 fixed rates increased by up to 30 bps. "Interestingly, 27 variable rate home loans have fallen in the past month, by up to 30 bps from ANZ, My State, IMB, Bendigo Bank, Resi, Suncorp Bank, Wide Bay Australia and State Custodians."