Interest rate report #7 - 8th October '24

Here is your monthly interest rate report.

This gives you a quick, plain English update on interest rates.

Let’s dive in.

How are interest rates changing?

The speed of interest rate cuts slowed this month.

In last month’s update, I said that the average bank had slashed 0.63% off their 18-month rates. They’d also cut 0.35% off their 1-year rate.

The banks sharpened their pencils because the Reserve Bank lowered the OCR. It was the first time that happened in 4 years.

But those cuts settled over the last month.

The average bank only cut 0.03% off their 18-month rate in the last month. And 0.17% off the 1-year rate.

Keep in mind that there is another OCR announcement tomorrow afternoon.

If the Reserve Bank slashes 0.5% off the OCR, that could kick start another round of substantial cuts.

How much can I negotiate off my interest rate?

Last month, the banks were offering big discounts on the 18-month rate.

These discounts have all gone down. The banks are now willing to discount their rates around 0.1% off the advertised rate.

The average bank advertises 6.27% as their current 1-year rate.

But behind the scenes, they discount this to an average of 6.14%.

Some banks are going even lower.

Here are the interest rate discounts my team at Opes Mortgages negotiated last week.

What are the lowest interest rates in the market?

But, if you’re wondering, “How low will the banks go?” Here are the lowest interest rates we’ve recently negotiated at Opes Mortgages.

See how the lowest 1-year rate is not that far off 6%. But the 6-month rate is still high. Over 6.5%.

Just keep in mind these are the lowest rates negotiated. So, these are NOT all from the same bank.

For example, only 2 out of the 6 bigger banks will negotiate the 1-year down to 6.09% at the moment.

So don’t look at this table and think: “These are the exact interest rates I’ll be offered.”

These rates are a best-case scenario.

Is it getting easier or harder to get a mortgage?

A net 57% of mortgage brokers say that the banks are more willing to lend compared to the previous month.

That is the highest reading Tony Alexander’s survey of mortgage advisers has ever had.

Banks are loosening the purse strings. Big time.

If you couldn’t get a mortgage before. Maybe you can now (or maybe soon).

What cashback can you get?

No change to cashbacks since last month. Most banks are still offering 0.8% - 1% of your loan’s value.

What to look out for this month

The Reserve Bank has an announcement tomorrow at around 2pm.

Economists are split. Some think the Reserve Bank will slash 0.5% off the OCR. Some say 0.25%.

We’ll see what happens tomorrow.

My colleague, Andrew, will cover it all in his weekly newsletter, Private Property. It comes out on Thursday afternoon.

Need help with your mortgage? Hit reply and let me know your situation. I’ll come right back to you to see if my team can help.

Talk again next month,

Pete