The Commonwealth Bank of Australia (CBA) has announced fixed mortgage rate cuts of up to 90 basis points for both owner-occupiers and investors, effective from Tuesday, 24 September.
For owner-occupiers paying principal and interest (P&I), fixed rates will now start from 3.29 per cent, while rates for borrowers paying interest-only (IO) will start from 3.79 per cent.
Meanwhile for investors, rates for borrowers paying P&I will start from 3.44 per cent, and from 3.79 per cent for those with IO terms.
Earlier this month, Westpac reduced its fixed rates by up to 130 bps, which took its rates to as low at 3.29 per cent.
Westpac’s subsidiaries (Bank of Melbourne, BankSA and St.George Bank) also cut their fixed rates by as much as 140 bps, taking their rates to as low as 2.94 per cent.
Lenders, including Westpac, have also announced reductions to their variable mortgage rates.
ME Bank is the latest to announce such changes, reducing variable rates for investors by up to 49 bps, effective from Tuesday, 24 September.
ME’s investor variable rates now start from 3.63 per cent.
Further mortgage rate cuts are expected over the coming months, with analysts anticipating at least one additional cut to the cash rate from the RBA before the close of 2019.
According to AMP Capital chief economist Shane Oliver, the central bank may lower rates twice in the coming months, with cuts from the US Federal Reserve and the European Central Bank “reinforcing” the need for more monetary policy stimulus in Australia.
“Our view remains that [the RBA is] on track to cut the cash rate to 0.5 per cent in the months ahead in two [25 basis point] moves, and to some degree, the Fed cutting and the ECB easing last week reinforces that to the extent that the RBA would like to keep the Australian dollar down,” he said.