The lowest mortgage rates from the big four banks

Last week, NAB adjusted its interest rate forecast from one cash rate cut in 2013 to three rate cuts over the course of the year, with the first one expected on February 5.

As the countdown begins to the first RBA monetary policy meeting of the year, the question borrowers and first-home buyers will be asking is whether banks will continue to pass on only about 80% of official rate reductions of if they will be more generous.

There’s even been talk of the big four banks cutting their mortgage rates outside of RBA decisions as the competition for mortgages in a slow growth market heats up.

The major banks account for around 80% of all mortgage lending in Australia (three out of every four loans), and their loan books and deposit balances dwarf those of their lending rivals.

According to the most recent APRA banking stats (November 2012), the Commonwealth Bank has an owner-occupier mortgage book worth $215 billion, followed by Westpac ($168 billion), NAB ($136 billion) and ANZ ($125 billion).

Putting this into context, the fifth biggest mortgage lender is ING Direct, with an owner-occupier loan book worth $28 billion.

These are the current lowest fixed and variable rate offerings of the major banks:

(Where the advertised rate is the same, the loan with the lower comparison rate is ranked higher.)

Lowest variable rate offerings:

Lowest one-year fixed-rate offerings

Lowest three-year fixed-rate offerings

*A comparison rate includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure.

For information on refinancing, watch our free webinar Refinancing and the Interest Rates Riddle