Another lifeline has been extended to borrowers after Suncorp Bank announced it is dropping its home lending fixed interest rates.
Suncorp cut owner-occupier rates by up to by up to 0.76 percentage points, with the changes effective as of Friday.
The decrease means base rates have fallen across owner-occupied and investment home loans for two, three and five-year fixed terms.
Those on a three-year fixed rate will experience a decrease of 0.4 per cent to their interest rates.
Any fixed rate applications in the pipeline will also be impacted.
Suncorp said it was committed to providing customers seeking long-term security with a competitive option to fix or split their lending and was responding to the changing rate environment with this announcement.
It is not alone in cutting fixed rates, with a growing number of banks opting to do the same.
Westpac Bank announced on Thursday it was dropping its interest rates for Australians looking to buy into the bank’s Flexi First variable home loans.
Rate City research director Sally Tindall said Suncorp was the 15th lender to cut its fixed interest rates this month.
“Banks including Macquarie, CBA and Westpac have all also cut at least one fixed rate since the RBA meeting on August 2,” she said.
“We expect more banks to cut their fixed rates in the coming weeks and months.”
She said banks could be cutting their rates to entice customers to sign fixed rate contracts.
“With millions of borrowers rolling off their fixed rates in the next 12 months, banks will need to put better deals on the table to retain their customers,” Ms Tindall said.
“One way banks can protect themselves from losing customers during the surge in refinancing is to lock people into a fixed-rate contract.”
But Ms Tindall warned that lower fixed rates “doesn’t necessarily make it a good deal”.
“Deciding between a fixed and variable rate is a gamble. Just how many more RBA hikes are ahead remains a contentious issue,” she said.
“While some fixed rates are coming down, and further drops are expected in the coming months, the days of fixed rates under 2 per cent are gone and incredibly unlikely to return in the foreseeable future, if ever.”
“Despite the recent fixed rate drops, most banks’ lowest rates are still variable, even after four months of RBA rate increases.”