The big banks have moved to protect their margins on their established book of mortgages by cutting fixed rates but leaving variable rates untouched.
In response to the Reserve Bank’s monetary policy decision on Tuesday, which included reductions in the target cash rate and the term funding facility rate from 25 basis points to 10 basis points, Commonwealth Bank announced a 100 bps rate reduction on new four-year fixed rate mortgages to 1.99 per cent.
Westpac and NAB made similar moves. ANZ’s cuts to fixed rates ranged from 20 to 40 bps.
The CBA rate is available for owner occupiers paying principal and interest and on a package. The bank said this was its lowest ever advertised home loan rate.
CBA cut two and three-year fixed rates by 15 bps to 2.14 per cent and cut the one-year rate by 10 bps to 2.19 per cent.
CBA cut the business loan rate by up to 51 bps and is now offering a secured rate of 2.99 per cents and an unsecured rate of 3.99 per cent through the government’s SME loan guarantee scheme.
Its secured BetterBusiness loan rate was cut by 50 bps to 2.49 per cent on new three, four and five-year loans.
Westpac cut its four-year fixed mortgage rate to 1.99 per cent for owner occupiers paying P&I and on a package.
Westpac’s rate for one, two and three-year terms has been cut to 2.09 per cent.
Westpac cut its business loan rates by up to 56 bps. The fixed for terms between three and five years, under the SME loan guarantee scheme, was cut to 2.38 per cent and the variable rate on new fully secured small business loans was cut was 29 bps to 3.09 per cent.
NAB cut its one-year rate by 10 bps to 2.19 per cent, its two-year rate by 10 bps to 2.09 per cent and its three-year rate by 20 bps to 2.09 per cent.
As with the other banks, it made a big cut to its four-year rate – down 81 bps to 1.98 per cent.
NAB’s QuickBiz loan rate will be cut by 200 bps, with offer open until the end of January.