The Cooperative Bank has announced a rate cut to its 18 month home loan offer.
The new rate is 4.99%, down from 5.49% a cut of -50 bps.
It is effective immediately and this rate offer will run to the end of May.
The rate is available to both new and existing clients.
No cash incentive is available with this rate.
They have not changed any other home loan rate.
The last time an 18 month home loan rate was below 5% was in August 2013 when SBS Bank offered a similar 4.99% rate.
Cooperative Bank chief Bruce McLachlan said "there will be no cash paid on this offer, regardless of what competitors are doing. We have done this specifically to expose the ridiculousness of cash [incentive] offers only being for new customers and new deals, and hence existing customers missing out. There is no cash, but it is available to existing customers as well as we believe that to be fair."
Until recently, SBS Bank was offering a 4.99% rate for a five year term "for members only". (This rate offer ends on April 30, 2015.)
Over recent months, interest rates have been trending downwards due to low inflation and global interest rate trends. The Co-operative Bank is making adjustments to both lending and deposit rates to reflect these trends. We will report on the term deposit changes separately.
Tomorrow's Reserve Bank OCR review is likely to confirm its recent comments that the OCR is more likely to fall than rise, giving banks confidence to announce lower rates ahead of the official signals.
The home loan market, at least for fixed-term loans, continues to be very competitive.
Also be aware, just because a bank is not formally offering a cash incentive does not mean it will shy away from matching a rival's offer. You can only know that in the 'heat' of an actual negotiation.
See all banks' carded, or advertised, home loan rates here.
The current non-rate incentive offers are here.
This is how mortgage rates from the banks will compare at 8am Thursday, April 30, 2015:
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
 |
5.49% | 6.09% | 5.39% | 5.79% | 6.49% | 5.89% |
 |
5.59% | 5.99% | 5.39% | 5.39% | 5.99% | 5.65% |
 |
5.49% | 5.39% | 5.55% | 5.65% | 5.75% | |
 |
5.59% | 5.39% | 5.39% | 5.99% | 5.79% | |
 |
5.99% | 5.99% | 5.39% | 5.59% | 6.39% | 5.65% |
 |
5.59% | 4.99% | 5.39% | 5.59% | 5.75% | 5.79% |
 |
5.29% | 5.29% | 5.29% | 5.29% | 5.29% | |
| SBS Bank | 5.59% | 5.74% | 5.19% | 5.49% | 5.79% | |
 |
5.70% | 5.80% | 5.35% | 5.60% | 6.40% | 5.85% |
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Mortgage choices involve making a significant financial decision so it often pays to get professional advice. An AMP360 mortgage broker can be contacted by following this link »
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