Below you will find the latest mortgage news from the last couple of weeks. For more information and links to these headlines follow us on twitter@MortgageBrief

• Reserve Bank of Australia says that the election won’t stop us raising rates Wednesday 21st July 2010
• Inflation the key to rate rises RBA
• Lenders may increase rates independent of RBA due to higher funding costs – Monday19th July 2010
• 95% loans are still available
• Interest rates remain on hold at 4.50% – Tuesday 6th July 2010

The Reserve Bank of Australia announced that it is leaving interest rates on hold at 3.75%. In a surprise move that stunned most economists the RBA wants to see if the effects of earlier rate rises.

More to come…

Interest rates over the holiday period will likely remain stable until the Reserve Bank of Australia meets in early February. There were talks of a January meeting but it seems that its significant rate cut of 1% at their last meeting seemed to do the trick.

Economists are predicting that rates will continue to fall in 2009 but by how much it is any bodies guess. This will largely depend on how the world economic crisis flows through to the Australian economy.

Updated below are the better home and investment loans interest rates from lenders with the most competitive offerings. Please note that home loan rates have very similar pricing to investment loan rates.

Introductory Rate Home Loans

NAB – 1 Year Discounted Variable – 4.99% first year then 6.29%, Comparison Rate = 6.77%

RAMS Home Loans – Rate Relief – 5.69% first 2 years then 6.29%, Comparison Rate = 6.22%

Bank West Rate Tracker – 5.82% first 2 years then 6.68%, Comparison Rate = 6.57%

Basic Variable Home Loan

Heritage Building Society Basic Loan – 6.07% – Comparison Rate = 6.09%

RAMS Home Loans – 6.09% – Comparison Rate = 6.12%

St George Basic Home Loan – 6.17% – Comparison Rate = 6.20%

Professional Packaged Home Loans (Recommended for $250K plus borrowers)

Commonwealth Bank Wealth Package – 6.04% – Comparison Rate = 6.22%

ING Home Loans – Smart Pack – 6.13% – Comparison Rate = 6.15%

Westpac Home Loans – Premier Advantage – 6.21% – Comparison Rate = 6.41%

Low Doc Loans

Commonwealth Bank Low Doc – 6.04% – Comparison Rate = 6.22%

ANZ Home Loans –  Simplicity Plus – 6.21% – Comparison Rate = 6.23

Westpac Home Loans – Premier Advantage – 6.21% – Comparison Rate = 6.41%

Line of Credit Loans

Commonwealth Bank  - 6.09% – Comparison Rate = 6.22%

Suncorp Line of Credit – 6.20% – Comparison Rate = 6.35%

NAB Home Equity – 6.22% – Comparison Rate = 6.33%

Fixed Rates

BankWest 2 Year Fixed – 5.19% – Comparison Rate = 6.64%

Westpac 3 Year Fixed Rate – 5.49% – Comparison Rate = 6.21%

NAB 3 Year Intro Fixed Rate – 5.49% – Comparison Rate = 6.50%

BankWest 5 Year Fixed – 6.19% – Comparison Rate = 6.65%

Important Notes

The loans mentioned above may not be suitable for your lending needs. Please contact us of submit an online enquiry.

The interest rates mentioned are only available on the date published and are subject to change.

Comparison rates are based on a $250,000 loan for 25 years. This Comparison Rate applies only to the example or examples given. Different amounts and terms will result in different Comparison Rates. Costs such as redraw fees or early repayment fees, and costs savings such as fee waivers, are not included in the Comparison Rate but may influence the cost of the loan.

December 2nd saw the Reserve Bank of Australia cut interest rates by another 1%. To the Australian consumer it means a reduction in their variable loan repayments but the full interest rate cut will only be passed on by a few lenders.

In a swift decision, Commonwealth Bank and NAB decided to pass on the full 1% rate reduction while other lenders took their time in assessing whether they should follow or pass on part of the rate cut. As the days went on we heard the news trickle from each lender and below is a summary of how much each lender will reduce their interest rates this time round.

Commonwealth Bank, NAB, ING Direct, Heritage - 1%

RAMS, Suncorp – 0.90%

St George – 0.85%

ANZ – 0.83%

Westpac – 0.80%

Of all the lenders mentioned above, this leaves Commonwealth Bank, ING, NAB and Heritage Building Society with the most competitive home and investment loan products on the market and I expect them to be very busy in the next couple of months.

While it might be the case now that these lenders are offering lower interest rates, I expect the other lenders will reduce their rates or come out with special offers that will help them regain market share in the home loan sector.