Yesterday’s decision by the RBA to keep rates on hold at 4.25% was bad news for Australia’s home owners who were hoping for some relief after the recent out-of-cycle rate changes passed on by the nation’s largest home loan lenders.
Analysis by Mozo’s Rate Chasers reveals that three quarters of the nation’s home loan lenders followed the ANZ’s lead and raised their standard variable rates in February and March.
It was the largest out-of-cycle rate change in the Australian home loan market since the Global Financial crisis started, with lenders increasing their standard variable rates by an average of 10 basis points – even more than the original ANZ rate change of 6 basis points.
Home loan lenders who bucked the trend and kept their rates on hold to capitalise on customer dissatisfaction with the Big 4 banks include mutuals such as Teachers Mutual Bank and Community First, online lenders and challenger banks such as MyRate and ME Bank.
All eyes are now on the ANZ, due to make its monthly rates decision on Friday the 13th!
Fixed home loan rates continue to move upwards
There is ongoing movement in fixed home loan rates and this trend is likely to continue.
25 lenders increased their one year fixed rates in March by an average of 19 basis points, lifting the average one year fixed rate to 6.25%. The average one year fixed rate is still nearly 50 basis points below the average variable rate of 6.74%, but this margin is expected to shrink further in April.
Savings rates start to climb
For the first time in 2012, savings account rate increases outpaced decreases sparking a new round of competition for deposits. Among the providers to increase savings account rates include Commonwealth Bank, Westpac and St. George who are trying to compete more effectively against the direct providers and challenger banks who are aggressively acquiring market share right now such as UBank and RaboDirect.
And in the term deposits market, 15 providers lifted their one year term deposit rates in March by an average 29 basis points.
Head to Mozo for full market comparisons of Australia’s home loans, savings accounts, term deposits and more.