ABC hikes 3-year fixed rate – will other majors follow?
The ABC has raised its 3-year fixed rate for homeowners, a further sign that Australia may soon see the end of ultra-low fixed rates.
Australia’s largest bank increased its 3- and 4-year fixed rates for homeowners paying principal and interest by 0.05%, and increased some interest-only loans by 0.10%.
This follows a 0.20 percent hike by ABC in March to its 4-year fixed rate. ABC now only has a rate below 2 percent – fixed for 2 years.
ABC Home Loan Changes for Homeowners Paying Principal and Interest:
| Lowest rates | Old tariff | New tariff | Switch |
| Fixed 3 years |
2.14% |
2.19% |
0.05% |
| Fixed over 4 years |
2.19% |
2.24% |
0.05% |
Note: The above rates apply to homeowners paying principal and interest on a fixed price mortgage. Data correct as of 21.05.2021
Changes in mortgage rates over the past month
| Lenders who cut | Lenders who have worked | Current lowest rate | |
| 1 year fixed |
ten |
3 |
1.67% |
| 2-year fixed |
12 |
3 |
1.74% |
| 3 years fixed |
9 |
6 |
1.79% |
| 4 years fixed |
1 |
20 |
1.95% |
| 5 years fixed |
2 |
17 |
2.10% |
| Variable |
17 |
5 |
1.77% |
Source: RateCity. Note that some lenders have increased and reduced several mortgage rates. Data correct as of 05.21.2021.
RateCity.com.au research director Sally Tindall said the CBA has become the first major lender to increase its 3-year fixed rate from the bank’s record low.
“Today’s rate hikes may be small, but they indicate a fixed rate market starting to rise,†she said.
“When the CBA raised its four-year rate in March, a wave of lenders followed in its wake. We expect the same to happen with three-year rates in the coming months.
“Banks anticipate an increase in the cost of funding over the next few years, with the next hike in cash rates expected in 2024, if not sooner, and the RBA’s term funding facility ending just over ‘a month.
“The financing, which provides banks with low, fixed-price money for three years, has helped lenders deliver historically low rates to their customers. Once the funding is complete, many banks will likely recalibrate their rates, â€she said.
Homeowner Mortgage Rates of the Big Four Banks
| CBA | Westpac | ANZ | NAB | |
| 1 year fixed |
2.09% |
1.99% |
2.04% |
2.09% |
| 2-year fixed |
1.94% |
1.79% |
2.04% |
1.89% |
| 3 years fixed |
2.19% |
1.88% |
2.04% |
1.98% |
| 4 years fixed |
2.24% |
2.19% |
2.24% |
2.19% |
| 5 years fixed |
2.99% |
2.49% |
2.24% |
2.49% |
| Variable |
2.69% |
2.19% for 2 years then 2.69% |
2.72% |
2.69% |
Source: RateCity. Note: Westpac rates are a loan to value ratio of up to 70%. Variable NAB with compensation for loans over $ 750,000. Data correct as of 21.05.2021
Lowest rates on the RateCity database
Rates are for owner-occupiers who pay principal and interest. Certain LVR requirements apply. Data correct as of 21.05.2021