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Record-low rates are likely being driven by money markets, which are already pricing in two more RBA rate cuts by the end of the year, ME Bank head of home loans Patrick Nolan said.
“Even though the RBA didn’t cut in April, customers can still get their rate cuts today – through a fixed loan,” Mr Nolan said.
“With competition hotting up, many banks will pass these fixed rate savings directly on to customers,” he said.
“Banks are fighting over a smaller slice of the lending pie which is helping to push fixed rates to never before seen lows.”
ME Bank yesterday cut its three-year fixed rate to 3.99 per cent.
The bank has also introduced greater flexibility in its fixed loans to increase appeal.
“We now let new customers pay an extra $30,000 over their fixed term – which is an average of over $830 a month in extra repayments on a 3-year fixed term,” Mr Nolan said.
“Banks are working harder than ever before to win new customers,” he added.