More non-majors reduce rates

Bendigo Bank has reduced its fixed home loan and business loan interest rates, while MyState Bank has decreased new fixed rate home loans, and AMP Bank has also flagged fixed rate home loan changes.

The rate cuts have followed similar moves by the major banks and other non-major banks, and have come after the Reserve Bank of Australia (RBA) cut the official cash rate from 0.25 per cent to a new record low of 0.10 per cent.

Bendigo Bank

New fixed home loan rates will decrease by between 0.15 per cent and 1.10 per cent per annum across one to five-year terms for owner-occupier customers paying principal and interest.

For investors, the bank has reduced home loan rates by between 0.05 per cent and 0.70 per cent per annum.

For business customers, the bank will reduce fixed rates by between 0.26 per cent per annum and 0.45 per cent per annum for secured and unsecured term loans.

Key home loan and business loan rate changes include:

• New four-year fixed home loan rates for owner-occupiers paying principal and interest will reduce by between 1.10 per cent per annum and 2.09 per cent per annum;
• New one, two and three-year fixed home loan rates for owner-occupiers paying principal and interest will decrease by between 0.15 per cent per annum and 0.25 per cent per annum, to 2.19 per cent per annum;
• A reduction of 0.05 per cent per annum for new one and two-year fixed home loans and 0.15 per cent per annum for three-year terms to 2.59 per cent per annum for investors paying principal and interest, and to 2.79 per cent per annum for investors paying interest only;
• New four-year fixed home loan rates have been reduced by 0.70 per cent per annum to 2.79 per cent per annum for investors paying principal and interest, and to 2.99 per cent per annum for investors paying interest only; and
• A reduction of up to 0.45 per cent per annum for residentially secured fixed small-business term loans, bringing the one-year rate to 2.22 per cent per annum, the two-year rate to 2.26 per cent per annum, and the three to five-year rates to 2.38 per cent per annum.

The interest rate changes are applicable to customers newly fixing their loans and will be effective from 13 November.

Commenting on the rate changes, Bendigo Bank managing director Marnie Baker said: “We remain committed to supporting our customers and all stakeholders in our nation’s economic recovery. We are in a record-low interest rate environment and any decision on rates must take into consideration and balance the outcomes for all our stakeholders, including borrowers, depositors and shareholders.”

MyState Bank

The ASX-listed Tasmania-based bank has announced that it will decrease new fixed rate home loans by up to 1.00 per cent, effective 9 November.

MyState Bank’s one, two and three-year new fixed rate owner-occupied home loans with a loan-to-value ratio (LVR) of less than 80 per cent will reduce 30 bps to 2.09 per cent, while the five-year term with an LVR of less than 80 per cent will reduce 100 bps to 2.79 per cent.

The rate changes are applicable to new customers and existing customers who do not have a home loan with MyState Bank, such as deposit holders.

In addition, MyState Bank has also made rate cuts to a number of owner-occupied variable rate home loan products by 20 bps for new lending.

The bank has made the following changes to fixed rate home loans:

• 0.30 per cent per annum decrease for new owner-occupied one, two and three-year fixed rate home loans with an LVR of less than or equal to 80 per cent; and
• 1.00 per cent decrease for new owner-occupied five-year fixed home loan with an LVR of less than or equal to 80 per cent.

Variable rate home loan changes include:

• 20 per cent decrease to new owner-occupied basic variable and special residential loans with an LVR ratio of less than or equal to 60 per cent;
• 20 per cent decrease to new owner-occupier basic variable and special residential loans with an LVR ratio of less than 80 per cent; and
• 20 per cent decrease to new standard variable home loans.

The changes are also applicable to existing customers who have a home loan with MyState Bank, but who are not on a fixed rate.

Meanwhile, the bank has announced a 0.20 per cent decrease for new one, two, three and five-year fixed rate loans (fully secured) for business and agribusiness loans.

Speaking about the rate changes, MyState Bank general manager, banking, Tony MacRae said: “The Reserve Bank have cut official interest rates six times in the last 18 months, and we’re now seeing rates at historical lows. It’s important that we carefully manage lending interest rate changes while balancing the needs of our deposit holders.”

“We have reflected on this in our most recent interest rate decision and the outcome of reducing our fixed rates provides new and existing customers the option of certainty of future repayments with a historically low interest rate.”

In addition, MyState Bank is offering a $2,000 bonus for new applications before 30 November from customers looking to refinance loans from another lender to the bank.

AMP Bank reduces fixed rate home loan

Effective 11 November, the bank will reduce fixed rate home loans for owner-occupiers on the Professional Package, paying principal and interest.

The changes include:

• 22 bps cut to two-year fixed rate and 52 bps cut to three-year fixed rate to 1.97 per cent per annum (3.01 per cent per annum comparison rate); and
• 70 bps cut to the five-year fixed rate to 2.29 per cent per annum (2.96 per cent per annum comparison rate).

AMP Bank will also continue to waive the variation fee for switching from variable to fixed (within the same product type) for existing clients wishing to take advantage of the new fixed rates, it said.

In addition, the bank said it would place a freeze on forced sales for current and previous clients on COVID-19-related repayment deferrals, who are working with the bank, to help keep them in their home.

This is only applicable to owner-occupied properties for clients that entered repayment pause during or after March 2020, have had their loan with AMP Bank for at least 12 months, and were not in arrears on their loan in the 12 months prior to entering the repayment pause.

This will be in place until 1 January 2022.

Furthermore, AMP Bank will discontinue monthly deposit account management fees for everyday banking clients who were previously on a temporary pause.

[Related: Cash rate won’t rise for 3 years: RBA]

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.