Banks go their own way: rates slashed ahead of RBA decision

Ahead of the RBA decision today, several banks have made bold moves suggesting the battle for banking clients business is officially on.

Kicking off with great fanfare, HSBC announced a pre RBA decision cut to its Home Value variable loan, down to 4.75%, giving it the lowest variable rate offered by a lender with a branch network. They are also offering to waive up-front fees and the loan doesn't have any ongoing fees. A competitive offer, but not enough to compete with online only lender who still offer the best variable rate in town starting at 4.49%.

BOQ has also made a recent announcement that it will bring down home loan rates irrespective of which way the cash rate moves, promising to reduce the headline interest rate on the Clear Path variable and line of credit products to 4.87% and 5.07% respectively, effective Monday 10 February.

Fixed rate loans are also coming down with NAB trimming 5 basis points off its 3 year rate (now 5.14%), and 20 basis points off its 4 year rate (to 5.44%), while Westpac also cut its 3 year rate by 5 basis points (matching NAB's 5.14%). Citibank joined the fray by slashing 25 basis pints from its 1 year rate, now 4.74%.

The big banks may be getting the headlines but it's still the smaller players that offer the best rates. One year rates start as low as the 3.99% offered by IMB, the best 2 year rate is Newcastle Permanent's 4.64%, and the lowest 3 year rate is QT Mutual Bank's 4.79%.

Out of cycle rate cuts can only be considered a good thing if it opens up opportunity for consumers to get a better deal on their home loans and save money with record low rates.