Macquarie Bank cuts fixed mortgage rates in Australia

Macquarie Bank has reduced its fixed mortgage rates for the second time this year. The bank lowered its two and three-year fixed rates by 16 basis points to 5.39 percent. This move suggests that banks expect interest rate cuts from the Reserve Bank of Australia. Mozo money expert Rachel Wastell commented that Macquarie is becoming a strong competitor against the Big Four banks. She believes Macquarie will continue to grow its share in the home loan market. Homeowners looking for stability can consider moving their loans to this fifth-largest bank. Currently, fixed rates are more attractive than variable rates. It is anticipated that the Reserve Bank will cut interest rates two more times this year, reducing the cash rate from 4.1 percent to 3.6 percent. If this happens, those with variable mortgages could see additional savings. However, locking in a fixed rate could be less beneficial if the Reserve Bank cuts rates three more times, lowering them to 3.35 percent. For instance, a homeowner with a $600,000 mortgage would pay $93 more each month, amounting to about $1,116 more per year, if they chose to fix their rate. To manage risks, Wastell suggested splitting loans between fixed and variable rates. This approach offers the chance to benefit from falling rates while maintaining more predictable repayments. Looking ahead, economic uncertainty remains. Tariffs imposed by the U.S. could increase inflation, affecting future interest rate decisions. The next Reserve Bank meeting, which may influence these rates, is scheduled for April 1.