Suncorp Bank lowers fixed interest rates on home loans
Another lifeline was extended to borrowers after Suncorp Bank announced it was scrapping its fixed interest rates on home loans.
Suncorp cut homeowner rates by up to 0.76 percentage points, with the changes taking effect from Friday.
This drop means that base rates have fallen for owner-occupied home loans and real estate investments for fixed terms of two, three and five years.
Those with a three-year fixed rate will see a 0.4% drop in their interest rates.
All ongoing fixed rate applications will also be impacted.
Suncorp said it was committed to providing customers looking for long-term security with a competitive option to fix or split their loans and was responding to changing rates with the announcement.
It is not alone in cutting fixed rates, with a growing number of banks choosing to do the same.
Westpac Bank announced on Thursday that it is lowering interest rates for Australians wishing to take out the bank’s Flexi First variable home loans.
Rate City research director Sally Tindall said Suncorp was the 15th lender to cut fixed interest rates this month.
“Banks including Macquarie, CBA and Westpac have all also cut at least one fixed rate since the RBA meeting on August 2,” she said.
“We expect more banks to cut fixed rates in the weeks and months ahead.”
She said banks could cut rates to entice customers to sign fixed-rate contracts.
“With millions of borrowers dropping their fixed rates over the next 12 months, banks will need to offer better deals to retain customers,” Ms Tindall said.
“One way for banks to protect against losing customers during the refinance surge is to lock people into a fixed-rate contract.”
But Ms Tindall warned that lower fixed rates ‘do not necessarily make it a bargain’.
“Deciding between a fixed rate and a variable rate is a gamble. The number of additional RBA hikes to come remains a contentious issue,” she said.
“While some fixed rates are falling and further cuts are expected in the coming months, the days of fixed rates below 2% are over and extremely unlikely to return in the foreseeable future, if ever. “
“Despite recent fixed rate cuts, most banks’ lowest rates are still floating, even after four months of RBA rate hikes.”
Originally published as Suncorp Bank changes fixed mortgage interest rates