Mortgages at Their Cheapest in 23 Years

LENDERS have cut interest rates for the most popular type of fixed-rate mortgage to their lowest levels in more than two decades, amid bets the cash rate will fall to a record low as early as next month.

 

As Westpac cut its rate on two-year fixed loans below 5 per cent on Thursday, figures from comparison website RateCity showed the average cost of a three-year fixed home loan has fallen to its lowest level in 23 years, at 5.53 per cent.

 

A spokeswoman at RateCity, Michelle Hutchison, said it had become cheaper for the banks to offer these mortgages because of growing market bets the Reserve Bank would cut the cash rate from 3 per cent.

 

NAB's three-year fixed loan is 5.29 per cent and ANZ, the Commonwealth Bank and Westpac charge 5.39 per cent, she said.