Both the majors and non-majors are in the midst of a fixed interest rate cutting frenzy.
The cuts give borrowers the opportunity to lock in super low interest rates over a longer period.
The Commonwealth has cut its fixed rate five-year loan to a record low for them – 4.99 per cent. NAB and Westpac were quick to follow suit with the same rate.
Bank of Melbourne, Citibank and AMP have all also cut their rtaes to below 5 per cent.
The cost of borrowing has been driven down by concerns of slowing global economic growth. A rise in inflation in the June quarter however will mean a further cut to the official rate will be unlikely when the RBA next meets, and it may even bring forward a rate rise.
The rise in inflation is further frustration to RBA governor Glenn Stevens’ attempts to reign in the Australian dollar because threatening to cut rates is how he can talk down the currency but he can’t do that while inflation is up.
Representatives from the banks have said they are able to cut their rates due to changes in the global money markets which have made it cheaper for them to raise long-term funds.
Economists are expecting a rise in borrower’s looking for home-loan certainty and taking advantage of the banks’ low-rate fixed-term loans.