Lenders Cut Home Loan Rates Ahead Of Rba Decision | The Business | Abc News

Competition between lenders is heating up ahead of the Reserve Bank's next board meeting on May 20. Economist forecasts and market pricing are pointing to a 0.25 of a percentage point interest rate cut by the RBA as a near-certainty. NAB is an outlier, expecting a double cut, plus more cuts in July, August, November and February, to take the cash rate to 2.6 per cent. Some mortgage borrowers may already have access to lower rates. Canstar's data insights director Sally Tindall says more than 24 lenders have cut their fixed rates in the past month. The country's biggest bank, the Commonwealth Bank, grew its home loan book by more than 4 per cent in the first three months of this year. Last week, it cut its variable rate to 5.84 per cent to match rivals Westpac and ANZ. Sally Tindall said: "There are 35 lenders on our database offering at least one variable rate under 5.75 per cent; you can actually do better than what the big banks are offering." Ms Tindall has run the numbers on whether fixed or variable rates end up being cheaper over the next two years, for a homeowner with a $600,000 mortgage. Her calculations assume three cash rate cuts through to the end of 2025. The fixed rate option would cost a homeowner only about $640 more in interest than if they had opted for the lowest variable rate.
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