Mortgage Informer

HSBC Bank Australia has cut its fixed home loan mortgage rates, citing a recent fall in borrowing costs.

The biggest reduction was to the bank’s three-year fixed rate for new customers, which has fallen to 7.99 per cent, from 9.29 per cent previously.

HSBC Australia head of home loans John Lane said the reductions would provide welcome relief from recent increases in variable interest rates.

“Recent weeks have seen a significant reduction in the medium and long-term cost of fixed-rate funds in the commercial market,” Mr Lane said today.

Mr Lane said yields had loosened as the market factored in the expectation the Reserve Bank of Australia (RBA) would cut official interest rates in the coming months.

The interest rates on HSBC’s fixed-term mortgages have fallen between 35 and 130 basis points, the bank said today.

The one-, two- and three-year fixed rate for existing customers was cut to 8.99 per cent.
HSBC also dropped its four- and five-year fixed rate to 8.90 per cent. Student finance: money matters.

The RBA raised the cash rate four times between August last year and March to a 12-year high of 7.25 per cent.

In addition to passing on the four rate rises to their customers, the commercial banks have all lifted their lending rates beyond the central bank’s decisions, citing increased borrowing costs on wholesale money markets.

The RBA signalled a shift in its quarterly statement last week, saying there was increasing scope for a less restrictive stance on monetary policy in the period ahead.

Economists have widely tipped the RBA to cut the cash rate at its September’s board meeting.

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Tags: Mortgage, Mortgage Rates