bcu bolts on mortgage rates: offers lowest 5 year fixed rate going around

Mozo Experts Choice winner, bcu today made wholesale cuts to both fixed and variable home loan rates including a staggering 95 basis point cut to its five year fixed term, making it the outright market-leader by 49 basis points.

With the average big four fixed rate over five years currently sitting at 4.44%, bcu now offers a fixed rate of 3.50% across all terms from one to five years, which Mozo’s Head of Product Data Peter Marshall said, is an amazing rate.

“Historically speaking, this is a great fixed rate for a five-year fixed home loan. Not only has bcu beaten its closest competitor but its done it by almost half a percent which is pretty incredible,” said Marshall.

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The reductions come in spite of the RBA talking up a rate rise in the near future. Marshall believed that providers are banking on the cash rate remaining untouched for the next couple of years when offering these low fixed rates over lengthy terms.

“The RBA has been making noises on a rate rise for quite some time, but now a number of economists are saying that the cash rate will actually stay where it is and we’ve seen this expectation reflected in a host of fixed and variable rate cuts,” he said.

bcu’s rate cut, targeted at owner occupiers making principal and interest repayments, follows the recent trend of home loan providers making cuts to fixed mortgage rates with Mozo data from August and September revealing that 1 in 3 lenders have dropped fixed rates.

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The changes are good news for consumers who want a degree of certainty over their home loan repayments, but Aussies don’t necessarily need to fix the entirety of their home loan in order to make the most of this latest rate cut.

“There’s still an argument for hedging your bets and fixing just 50% to 60% of your home loan when refinancing so that you’re still exposed to changes to variable rates,” said Marshall.

“But by fixing your entire home loan at 3.50%, you will know exactly what your home loan repayments will be for the next 5 years - which can be extremely valuable for some homeowners on a tight budget,” he said.

If you’re considering fixing a part or your entire home loan, check out Mozo’s fixed rate home loan comparison tables and be sure to read our dedicated guide to whether fixed rate mortgages are right for you.