Two of the Big Four banks – Commonwealth Bank and ANZ – have also slashed their interest rates on fixed home loans, independently of the RBA.
RBA governor Philip Lowe said: “Lending standards are higher than they were a few years ago … there is more competition for borrowers of high credit quality.”
What does this mean for buyers and mortgage holders? It’s time to shop around.
“Take action sooner rather than later,” he said.
“With no cash rate action for two years now, and funding requirements for the larger banks becoming more stringent, the pressure on lenders to increase home loan interest rates is real.”
AMP Capital chief economist Dr Shane Oliver said the next interest rate move would likely be up, but not until 2020 at the earliest and there was a “rising risk that the next move would actually be down.
“However, the RBA’s own forecasts for decent growth and a gradual rise in inflation along with strong infrastructure investment and rising business investment, argue against a rate cut,” he said.
Looking to buy before interest rates start climbing? View our current listings for sale.