Interest Rate Update - May 2013

The May meeting of the RBA surprised everyone with the decision to reduce the cash rate by 0.25%. This time the major Banks moved very quickly, with all passing on the rate cut in full. ANZ cutting even further by reducing their variable rate by 0.27%. What will happen over the coming months, given the surprise this month some economists are predicting further cuts, whilst others are suggesting the Reserve Bank will watch what happens with the economy over the next few months. On the fixed rate front, 2 and 3 year fixed rates are available below 5% with a number of lenders. These are still very attractive compared to variable rates with most lenders’ standard variable rates above 6%.

Even with the reduction in rates we are still seeing the Banks offer very attractive discounting on their variable rate products. We continue to see discounts of between 0.70% and 1.06% off the Standard Variable Rates shown in the table below. All discounts negotiated by Oxygen are discounts below the rates shown in this table.

The Oxygen 2 Year Fixed Special remains the best advertised rate at 4.89%.


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