Fixed-rate home loans cut to 20-year low but RLC is still the winner
Posted
in Updates
@ Apr 22nd 2013 5:02pm
- By Garry Larden
Fixed-rate home loans cut to 20-year low but RLC is still the winner
National Australia Bank (NAB) is taking advantage of a surge in fixed-rate home loans by cutting its five-year mortgage rate to a 20-year low.
Big lenders have been battling it out over fixed loans and trying to lure borrowers to their books, but most of the movement has been on three-year loans.
NAB will cut 29 basis points from its five-year term to 5.55 per cent per annum, effective Monday.
Commonwealth Bank (CBA) is pricing five-year loans at 5.69 per cent
ANZ is the top of the market in the longer-term loans at 5.84 per cent.
It seems that the banks are keen to lend while the housing market remains subdued and wholesale funding is easy to get, and the drop in pricing on fixed rates coincides with Australian bank funding costs falling to the lowest level since the global financial crisis.
This is good news for property investors, but the wisest of the investors will tell you that they are utilising a "Revolving Line of Credit" (RLC) rather than a traditional mortgage, and by structuring their RLC so they pay off their properties well under a 25 or 30 year time frame... so they are not working hard, they are working smart...
