In a move that signals growing competition and optimism in the mortgage market, two Australian banks—Macquarie Bank and Police Bank—have slashed their home loan interest rates ahead of the Reserve Bank of Australia’s (RBA) highly anticipated May cash rate decision.
Macquarie Bank Cuts Variable Rates for Investors
Macquarie Bank, Australia’s fifth-largest lender, has reduced its variable interest rates for property investors, offering its lowest rate at 5.99% p.a. (6.01% comparison rate) for loans with a loan-to-value ratio (LVR) of up to 60%. This adjustment complements its earlier cuts to fixed rates, demonstrating a broader strategy to stay competitive amid shifting market dynamics.
These rate reductions are a notable sign that Macquarie is positioning itself to attract more investment borrowers at a time when lending growth has shown signs of softening.
Police Bank Drops Fixed Rates Below 5%
Meanwhile, mutual lender Police Bank has introduced dramatic cuts to its fixed home loan rates—bringing some below 5% for the first time in over two years. The most eye-catching offer is a three-year fixed rate of 4.99% p.a. for both owner-occupiers and investors making principal and interest repayments. This rate applies to borrowers with LVRs of up to 95%.
Police Bank also cut its two-year fixed rate to 5.15% p.a., making it one of the most competitive offerings currently available in the fixed-rate segment.
Market Braces for Potential Rate Cuts by RBA
These rate moves come as the market eagerly awaits the RBA’s next monetary policy meeting on May 20, where expectations are building for a potential rate cut. While some analysts forecast a 50 basis point reduction, others believe the central bank may adopt a more cautious 25 basis point cut instead.
With the RBA under pressure to respond to global economic uncertainty and the domestic slowdown in consumer demand, lenders are already adjusting their pricing in anticipation of more accommodative monetary policy.
What This Means for Borrowers
For borrowers, these recent rate cuts are welcome news, potentially reducing monthly repayments and increasing loan affordability—particularly for first-time buyers and refinancers.
However, experts urge caution. While falling rates can create opportunities, borrowers should always consider the full terms and conditions, including fees, comparison rates, and product features.
As the RBA’s May meeting approaches, the mortgage landscape appears to be heating up. Whether you’re in the market to buy, refinance, or invest, now may be a good time to reassess your options and speak with a mortgage advisor.