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1.67% gone: Bank ditches Australia's lowest-ever fixed rate

·2-min read
Australian cash, aerial view of houses in Australian suburb.
Here are the lowest interest rates available. (Images: Getty).

The lowest ever advertised 1-year fixed rate is no more, with BCU Bank hiking its 1.67 per cent rate on Friday. 

BCU’s 1-year fixed rate is now 1.89 per cent, with the lowest advertised rate available now 1.69 per cent.

That means that for every fixed rate category spanning 1 to 5 year rates, the lowest rates have now disappeared, analysis from RateCity released on Friday revealed. 

It comes after BankVic ended the lowest four-year fixed rate in early June

Lowest advertised home loan rates in Australia

Loan type

Historic lowest rate

Historic lowest rate

Difference

1 yr fixed

1.67%

1.69%

0.02%

2 yr fixed

1.74%

1.79%

0.05%

3 yr fixed

1.75%

1.89%

0.14%

4 yr fixed

1.89%

2.14%

0.25%

5 yr fixed

1.99%

2.27%

0.28%

Variable

1.77%

1.77%

0

Source: RateCity.com.au

“While the lowest fixed rates on record are now gone, we’re still in a low-rate environment where owner-occupiers can find a rate under 2 per cent,” RateCity research director Sally Tindall said.

“We’re living in an unprecedented period of historic low rates – mortgage holders can use that to their advantage because in two years’ time the market is likely to look completely different. We may never see rates this low again.

“Fixed or variable – customers still largely have the pick of it – but with most of these rates reserved for new customers or those willing to fix, you have to be proactive.”

Lowest rates on the Ratecity.com.au database


Lender


Rate


1 yr fixed


Greater Bank


1.69%


2 yr fixed


Greater Bank


1.79%


3 yr fixed


ING


1.89%


4 yr fixed


Teachers Mutual


2.14%


5 yr fixed


Freedom Lend


2.27%


Variable


Reduce Home Loans


1.77%


Source: RateCity.com.au

She said most banks are still offering at least one fixed rate under 2 per cent, but those are set to increase reasonably quickly. 

“While the RBA has made it clear it doesn’t expect the cash rate to rise until 2024, banks are hiking fixed rates in advance and will continue to do so as we edge closer to this date,” Tindall explained.

When it comes to variable rates, there are more options, with some 181 home loans still offering interest rates beginning with a ‘1’. 

In fact, the number of sub-2 per cent variable rates have doubled in the last three month.

The Reserve Bank of Australia is due to meet next Tuesday 3 August to decide the official interest rate. 

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Image: Yahoo Finance
Image: Yahoo Finance
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