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Is that a bank 'reducing interest rates' that I see before me?

Surely not, After four consecutive cash rate rises by the Reserve Bank in recent months which has been passed on to home loan customers with higher rates, are we now seeing a shift in interest rates....downwards?

In the last 24 hours, two banks have communicated a reduction in interest rates, which certainly goes against the flow in terms of recent rate rises.

ING Bank have just announced a reduction in their variable home loan interest rates. Having only announced on 21st July an increase in rates by 0.5%, it has now announced a reduction by 0.10%. effective 23rd August. Whilst not negating the full increase of a month ago, it certainly is going against the trend in terms of what we are seeing with variable home loan rates.

Bank of Queensland on the other hand, has today announced a reduction in their fixed rates, also effective 23rd August. Point to note being that fixed rates on the whole are markedly higher than the majority of variable rates currently in the market. However, a reduction in a fixed rate is uncommon in the current market.

Whether or not these interest rate moves signal an emerging trend is yet to be seen. However, it means that to take advantage of all interest rate announcements, home loan customers need to be nimble and ready and willing to act. We do not know what the future holds. Have your broker communicate with you when to act - and be ready to do so.


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