Shock as lenders slash rates to lowest level in 2 years off cycle
The dramatic milestone came even before the Wednesday quarterly consumer price index release – data that will determine which way the RBA rolls come its monetary policy meeting on August 12.
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The Police Credit Union threw the cat among the pigeons by slashing variables to 4.99 per cent for owner-occupiers with a 20 per cent deposit – a significant milestone that hasn't been hit since July 2023, according to Canstar research.
'The lowest variable rate is now a fraction above the lowest fixed rates in the market, despite the high possibility of further cash rate cuts from the RBA,' according to Canstar data insights director Sally Tindall.
Pressure is building for other providers to match that level out of the RBA cycle, with Horizon Bank and Pacific Mortgage Group offering rates of 5.24pc and 5.34pc respectively, while others like Homestar Finance, Australian Mutual Bank and RACQ are at 5.39pc.
'Variable home loan rates starting with a '4' are finally back on the table after a two-year hiatus,' Ms Tindall said.
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'Police Credit Union might not be a big name brand, but with this move, it's dialled up the competition in the variable mortgage market by at least a couple of notches.'
'The fact that the lowest variable rate is already below the 5 per cent barrier before an RBA cut, will put pressure on other low-cost lenders to drop rates below this mark.'
She said 'banks are sharpening their pencils to attract new customers. For anyone still sitting on a rate well into the 6's, it's a wake‑up call to get on the phone to your bank.'
The rate cutting frenzy extended into fixed rates, which have tumbled in the past fortnight, with 13 lenders slashing at least one, including Australia's fifth-largest lender Macquarie by up to 0.20 percentage points, while Greater Bank's lowest 2- and 3-year fixed rates are at just 4.94pc.
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Canstar figures show 17 lenders now have at least one fixed rate under 5pc, but Ms Tindall warned those who were thinking about fixing now needed to 'understand the trade‑offs – you might be buying peace of mind, but it could come at a cost if rates fall faster than expected'.
She said 'fixed rates continue to tumble as banks jostle for pole position, but that doesn't mean everyone should rush to lock in'.
'Banks are dangling sharp fixed rates in front of borrowers chasing short‑term certainty, but with RBA cash rate cuts still on the table, potentially as early as 12 August, fixing could be a gamble.'
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'It's likely that travellers are using these tools in addition to chatting with travel agents, conducting desktop research or seeking ideas and inspiration from social media. 'AI is evolving at a rapid rate and as it becomes more accessible and intuitive, it's not surprising that travellers are relying on new technology to help shape their dream holidays.' But the insurer warns against taking AI's word as gospel. With nothing to validate the credibility of such recommendations, Ford says travellers need to practice due diligence. 'AI can be a great starting point when planning a holiday, but always ensure you're crossing your 't's and dotting your 'i's,' he says. 'Many of these tools and services are still in their infancy stage and may not be 100 per cent accurate, so do your own research to ensure you're equipped with the right tools and information for your trip. 'The last thing we want to see is anyone getting themselves into a potentially dangerous or unsafe situation based on the recommendations from AI.' Ford makes a crucial point here about our relationship with platforms like ChatGPT. Rather than approaching them as one-stop-shop to curate every element of our holiday, we should instead consider them as a starting point to kick off deeper research. After all, isn't that part of the fun with travel — the anticipation in the lead-up, the process of discovering a destination before we have arrived and assembling a bucket list tailored to our specific taste? By asking a computer to generate an itinerary based on what's popular, we are depriving ourselves of creativity, spontaneity and adventure. We must also remember that what the AI bot spits out is dependent on the quality of our prompts. The more we refine our request, the more likely we will receive helpful answers, but even then things can go wonky. 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Leyanne Baillie — gen X Although my generation is confident when it comes to using tech (even if we're not digital natives), I think AI programs would be more effort than they're worth. I know it could be a time-saver in terms of journey-planning brainstorming and getting a rough guide of options, but I'd still want to tailor my itinerary to cater to my personal taste. I don't think I'm ready to hand over the reins completely to artificial intelligence just yet. Jessie Stoelwinder — millennial I love a good travel hack, and that's how I have been approaching my use of AI. Anything that makes life a little easier and frees me up to investigate the fun stuff — where to eat, hike, shop, people-watch etc. — and I am on board. I've used ChatGPT to quickly aggregate travel data for personal trips to assist with admin, logistics and practicalities, which I will then cross-check and verify to make sure the information works for me. Recommendations, however? Word of mouth and insider intel from a human being will always win, in my opinion. Megan French — g en Z I would be open to the idea of utilising AI when planning my travels but I'd take everything it recommends with a grain of salt while still doing my own thorough research. I think it's great for foundational information-based planning early in trip preparations, such as 'what holidays are on in India during July and how is best to navigate them?' But when it comes to booking flights and accommodation, I'd go nowhere near AI … yet .
