Are big banks signalling an interest rate cut? With Macquarie Bank and others lowering fixed rates, the market suggests a shift may be on the horizon. This could mean better deals for homebuyers, refinancing opportunities, and savings for borrowers. Stay informed about the Reserve Bank of Australia's upcoming decisions and how they impact you. Read the blog to explore these insights further!
Are Big Banks Introducing an Interest Rate Cut? What that means for you
At Search Property, we’re here to help you navigate the ever-changing property market with confidence and with the banks starting to make their moves, and it might just be a sign of what the Reserve Bank of Australia (RBA) is planning to do with interest rates. Let us break this down for you.
The RBA is meeting on February 17-18, and there’s a lot of buzz about the possibility of an interest rate cut—the first in over 18 months. That would be a pretty big deal!
So, what does this mean for you? Whether you’re thinking about buying a home, refinancing, or just keeping an eye on your budget, these changes could have a direct impact on your finances.
When banks start shifting gears, it can give us a sneak peek into what’s coming next.
Macquarie Bank, Australia’s fifth-largest bank, has started lowering its fixed home loan rates. This might seem like just another headline, but the potential for an interest rate cut is actually a big deal—especially if you’re looking to buy a home, refinance, or just keep an eye on your finances.
Back in October, Macquarie made a surprising move—they raised their fixed home loan rates while other banks were lowering theirs. Why? Because at the time, Macquarie expected interest rates to go up.
Fixed rates are like a bank’s prediction of where interest rates are heading. By raising them, Macquarie was signaling they thought rates would rise in the future.
Now, Macquarie has flipped the script. They’ve lowered their fixed rates, following the lead of other major banks like Commonwealth Bank (CBA) and ANZ. This shift suggests that banks might now expect interest rate cuts to happen sooner than originally thought.
Here’s what this means for you:
You might be wondering, “Does this even make a difference?” Let’s put it into perspective:
Macquarie’s recent cuts lower rates by 14–16 basis points. That might sound small, but on a $1 million loan, it means saving around $1,400 a year. That’s extra money you can put toward your bills, savings, or even treating yourself!
Banks don’t make these changes lightly—they’re often based on expectations about where the economy is heading. By watching what banks do, we get clues about the Reserve Bank of Australia’s (RBA) next moves on interest rates.
So, if you’re a homeowner or thinking about becoming one, this is your signal to stay informed and explore your options.
Macquarie Bank is now offering a 5.55% fixed rate for basic owner-occupied loans with a Loan-to-Value (LVR) ratio of less than 70% (LVR stands for Loan-to-Value Ratio and is a measure of how much you're borrowing compared to the value of the property). In simple terms, this is for borrowers putting down a 30% deposit.
For investors, their lowest fixed rate is 5.69% for those with an LVR above 70% who are making principal-and-interest repayments. While this rate is also available with offset loan options, offset benefits don’t apply during the fixed-rate period.
As mentioned above, Macquarie has started lowering their rates, signaling a potential shift in the market, possibly in anticipation of an interest rate cut. But here’s the catch: fixed rates are still less popular than variable rates.
This shows that most borrowers now prefer the flexibility of variable rates.
It’s not just Macquarie—other lenders like Australian Unity, G&C Mutual Bank, and Queensland Country Bank are also cutting fixed rates by up to 20 basis points. This suggests the market believes an interest rate cut is on the way.
The RBA rate tracker shows a 73% to 78% chance of a rate cut, a big shift from just a few months ago when the odds were only 10% to 20%, and there was even talk of a potential rate hike.
While a rate cut isn’t guaranteed, many bank economists now see it as highly likely. The key takeaway? Staying informed and ready to act can help you make the most of these changes.
Want to know more? Why not check out my Youtube Video on this exact topic, where I dive deeper into the potential impact of an interest rate cut and what it could mean for you.
If you’re ready to take action, book a FREE discovery call with my Search Property team. We can help you create a personalised strategy to get you started!
My book, Retire Filthy Rich with Real Estate, hits the shelves on February 26th. This is your go-to guide for navigating the ever-changing property market and taking control of your financial future. Don’t wait—preorder now and start your journey to financial success!
Disclaimer: Search Property Pty Ltd (SP) does not provide financial or investment advice and does not hold a financial services license as defined in the Corporations Act 2001 (Cth). Any advice given by SP is general in nature and does not take into account your personal circumstances or objectives, financial situation or needs.
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