Latest news with #fixedrates
Daily Mail
3 days ago
- Business
- Daily Mail
NS&I launches new fixed-rate savings accounts - here's what's on offer
National Savings and Investments has launched a new range of fixed-rate savings bonds for those wanting to lock their money away. The Treasury-backed bank has launched new issues of its Guaranteed Growth Bonds and Guaranteed Income Bonds, collectively known as British Savings Bonds. Savers will now be able to open new two, three and five-year bonds, while NS&I has also boosted the rates it pays on its existing two and three-year bonds. New NS&I customers can open the bonds as well as existing customers whose bonds are maturing. In April, NS&I launched new issues of its one, two, three and five-year fixed rate savings accounts. It was the first time these accounts had been available with NS&I at the same time. The rates on the issues launched today have fallen from the previous issues, however, in a blow to savers seeking better returns for locking their money away. The new two-year British Savings Bonds have been cut to 3.85 per cent for both the growth and income options, previously these bonds payed 4 per cent. The three-year versions of the bonds will offer 3.88 per cent, down from the previous issue's rate of 4.1 per cent. The new interest rate on the five-year growth option is 3.84 per cent down from 4.06 per cent. There is no change to the rate on the one-year British Savings Bonds, which remain at 4.05 per cent for both the growth and income option. At the same time, NS&I is changing the rate on its Junior Isa to 3.55 per cent. This is the first time the rate has changed on the Junior Isa since August 2023, when it was 4 per cent. Andrew Westhead, NS&I retail director, said: 'Today's announcement is in response to changes in the wider market and will ensure we continue to offer a range of fixed-term options while balancing the interests of savers, taxpayers and the broader financial services sector.' How do NS&I rates compare? The rates now fall well short of the best-buy fixed rate savings deals. The top two-year fixed rate bond on the market pays 4.43 per cent and is offered by Cynergy Bank, compared to NS&I's 3.85 per cent one-year bond. Savers can also do better than NS&I's three-year bonds by keeping their cash in the best three-year fixed-rate deals This pays 4.45 per cent and is offered by JN Bank. The best five year fixed-rate account pays 4.47 per cent and is offered by Birminggam Bank. Meanwhile the NS&I Junior Isa lags behind the best buys which is currently offered by Bath Building Society and pays 4.65 per cent. What are the benefits of saving with NS&I? Savers can put between £500 and £1million into the fixed rate bonds. Unlike other savings accounts, all money is 100 per cent guaranteed by the Government. This means savers don't have to spread their money between a number of savings accounts in order to make sure it is all protected, in the event that the provider goes under. When using normal savings accounts with a bank, deposits are protected up to £85,000 per bank - so those with more money than that are advised to open multiple accounts with different institutions. NS&I typically doesn't offer the highest savings deals on the market to avoid skewing it. The Treasury-backed bank said the new bond offerings balance the interests of savers, taxpayers and the broader financial services sector. Unlike Premium Bonds, these accounts are not tax-free.
News.com.au
3 days ago
- Business
- News.com.au
Interest rates risk emerges after key bank move
Expected interest rate cuts later this month will give most homeowners reason to celebrate but the cuts could be food for thought for one group: those who have recently fixed their loans. Homeowners and new property buyers have been urged to consider recent fixed rate offers by banks with caution given that there is a strong likelihood of variable rates dropping later this month. Lenders are currently offering fixed rates as low as 4.99 per cent – well below the average variable rate of about 5.7 per cent for new borrowers. ANZ has also joined in the cutting spree, dropping rates on some of its fixed rate products by 10-35 basis points this week. ANZ now has the cheapest fixed rates of the big four at 5.19 per cent for two-year fixed terms. mortgage expert Richard Whitten said homeowners tempted to fix their rates should consider the reason banks were introducing these offers. 'A lower fixed rate loan is often a bet that variable rates will fall further, allowing the bank to lock in a better deal for itself in the medium term,' Mr Whitten said. He added that lower fixed rates may be tempting for some. 'Most borrowers stick with variable rate loans. And these tend to be more competitive than fixed rate loans. But plenty of borrowers are waiting to lock in a low rate if the deals are good enough. 'There will always be some people willing to fix when rates drop. I think for some, 4.99 per cent looks pretty good right now.' Banks' fixed rate offers were a sign of which way they expected the cash rate to go when the Reserve Bank meets to discuss monetary policy next week Tuesday, Mr Whitten said. 'Lenders set their fixed rates based on many factors, but anticipation of future variable rate drops (via cuts to the cash rate) is one of them. Lenders dropping their fixed rates now is a sign that they expect variable rates to fall even further.' Mr Whitten said that borrowers who fixed their loans would effectively be paying more for 'certainty'. He explained that lenders introducing offers as low as 4.99 per cent may be banking on a 50 basis points drop in interest rates. Were this to happen, a variable rate of 5.45 per cent would drop to 4.95 per cent, allowing the bank to get slightly ahead if the borrower fixed their rate at 4.99 per cent for several years, Mr Whitten said. With fixed rate customers making up just 3 per cent of the customer base of some lenders, Mr Whitten added that there has been some reluctance from borrowers to take up fix rate offers so far. A recent Finder survey indicated most mortgage holders who were open to fixing their loans would only do so if the rates dropped as low as 3.11 per cent. But the temptation has been rising for some mortgage holders. The research found 18 per cent mortgage holders are close to fixing – admitting they would consider fixing all or part of their mortgage when rates drop to 4–4.9 per cent. One in four (26 per cent) would fix their mortgage when there's a three in front (3–3.9 per cent), while 25 per cent would wait to fix until fixed rates drop to between 2 per cent and 2.9 per cent. One in five (21 per cent) are holding out until the fixed rates are under 2 per cent. Mr Whitten said with rates starting to fall, fixed loans are back on the radar for borrowers. 'A fixed rate at 3.11 per cent is the magic number for many Aussies – it's the tipping point where borrowers feel confident to lock in their loans. 'Borrowers who fixed at the perfect moment when rates were at their lowest in 2020 managed to lock in historically low rates even as variable rates started rising. 'But it's not about beating the banks. Fixing your rate is more about buying peace of mind and predictability in an increasingly expensive world.' Canstar data insights director Sally Tindall said 13 different lenders were now offering at least one fixed rate under 5 per cent. 'If you're looking to lock in your rate, don't go aiming for one that starts with a 5 or a 6. You should be looking in the 4's,' Ms Tindall said. Bendigo Bank chief economist David Robertson said the RBA appeared 'very likely' to cut rates next week to 3.6 per cent.
Daily Telegraph
4 days ago
- Business
- Daily Telegraph
Major bank slashes interest rates
One of the major banks has made a power move ahead of the next Reserve Bank meeting to decide the cash rate, introducing new offers to entice more mortgage applicants to fix their loans. ANZ this week announced it would be slashing 10-35 basis points off one to five-year fixed home loan rates, a move that has meant it offers the cheapest fixed rates among the 'big four'. It's come as lending data shows few customers are choosing to fix rates amid wide expectations of another cash rate cut in July, followed by subsequent cuts later this year. This means most of the homeowners on variable rates have the power to chase the best deals in the market by refinancing to different lenders. MORE: Homeowners told to brace for rate cut bombshell ANZ's cheapest fixed rates are now 5.29 per cent and 5.19 per cent for one-year and two-year fixed terms, respectively. The move has occurred after a range of smaller lenders earlier slashed their fixed rates to just under 5 per cent. This included Pacific Mortgage Group, which is offering 4.99 per cent for one-year fixed terms, while Easy Street is offering 4.95 per cent for two-year fixed loans, according to Mozo analysis. Variable rates for new customers currently average about 5.74 per cent. Mozo finance expert Rachel Wastell said ANZ's fixed rate offers were likely a 'strategic first-mover play'. 'ANZ is getting ahead of the curve to lock in borrowers who might be contemplating a fixed rate before the RBA acts,' she said. MORE: One in six unit projects now 'ghost' towers 'Inflation data has also shifted expectations and the market now sees rate cuts as more imminent, so ANZ could be capitalising on that shift before the RBA confirms direction. 'By slicing just enough to undercut the other majors, ANZ gets to look competitive without actually joining the below 5 per cent pack. So it could also be a positioning move, just as much as a pricing one.' Canstar data insights director Sally Tindall said ANZ was moving on the assumption more cash rate cuts were imminent. 'This move by ANZ consolidates its lead as the lowest-cost fixed rate lender out of the majors,' she said. 'The bank is factoring in the possibility of further cash rate cuts, which could be coming down the line as soon as next week.' Ms Tindall added that customers were rarely choosing fixed rates. 'ANZ could also be looking to shore up its loan book by locking in more customers on fixed rate deals,' she said. 'The bank's most recent half year results show that just 3 per cent of its residential mortgage book is on a fixed rate contract. 'This means the remaining 97 per cent on variable rates are free to move at any time without major penalties.' Ms Tindall said homeowners considering fixing their rates should keep some perspective. 'While ANZ's fixed rates are streaks ahead of the other big banks, particularly on shorter terms, they're still a far cry from the lowest fixed rates in town, with a total of 13 different lenders now offering at least one fixed rate under 5 per cent,' she said. 'If you're looking to lock in your rate, don't go aiming for one that starts with a 5 or a 6. You should be looking in the 4's.'
News.com.au
4 days ago
- Business
- News.com.au
Major bank slashes interest rates
One of the major banks has made a power move ahead of the next Reserve Bank meeting to decide the cash rate, introducing new offers to entice more mortgage applicants to fix their loans. ANZ this week announced it would be slashing 10-35 basis points off one to five-year fixed home loan rates, a move that has meant it offers the cheapest fixed rates among the 'big four'. It's come as lending data shows few customers are choosing to fix rates amid wide expectations of another cash rate cut in July, followed by subsequent cuts later this year. This means most of the homeowners on variable rates have the power to chase the best deals in the market by refinancing to different lenders. ANZ's cheapest fixed rates are now 5.29 per cent and 5.19 per cent for one-year and two-year fixed terms, respectively. The move has occurred after a range of smaller lenders earlier slashed their fixed rates to just under 5 per cent. This included Pacific Mortgage Group, which is offering 4.99 per cent for one-year fixed terms, while Easy Street is offering 4.95 per cent for two-year fixed loans, according to Mozo analysis. Mozo finance expert Rachel Wastell said ANZ's fixed rate offers were likely a 'strategic first-mover play'. 'ANZ is getting ahead of the curve to lock in borrowers who might be contemplating a fixed rate before the RBA acts,' she said. 'Inflation data has also shifted expectations and the market now sees rate cuts as more imminent, so ANZ could be capitalising on that shift before the RBA confirms direction. 'By slicing just enough to undercut the other majors, ANZ gets to look competitive without actually joining the below 5 per cent pack. So it could also be a positioning move, just as much as a pricing one.' Canstar data insights director Sally Tindall said ANZ was moving on the assumption more cash rate cuts were imminent. 'This move by ANZ consolidates its lead as the lowest-cost fixed rate lender out of the majors,' she said. 'The bank is factoring in the possibility of further cash rate cuts, which could be coming down the line as soon as next week.' Ms Tindall added that customers were rarely choosing fixed rates. 'ANZ could also be looking to shore up its loan book by locking in more customers on fixed rate deals,' she said. 'The bank's most recent half year results show that just 3 per cent of its residential mortgage book is on a fixed rate contract. 'This means the remaining 97 per cent on variable rates are free to move at any time without major penalties.' Ms Tindall said homeowners considering fixing their rates should keep some perspective. 'While ANZ's fixed rates are streaks ahead of the other big banks, particularly on shorter terms, they're still a far cry from the lowest fixed rates in town, with a total of 13 different lenders now offering at least one fixed rate under 5 per cent,' she said. 'If you're looking to lock in your rate, don't go aiming for one that starts with a 5 or a 6. You should be looking in the 4's.'
The Australian
29-05-2025
- Business
- The Australian
Interest rates, inflation: CBA slashes fixed rate as banks race to cut interest on mortgages
The Commonwealth Bank of Australia has announced on Thursday it will slash fixed rate home loans by up to 0.40 percentage points across all fixed terms, but experts say it will not be enough to get Aussies to lock in. The change will be in place from Friday, to coincide with a 0.25 cut in CBA's variable rate following the RBA cash rate cut earlier this month. CBA's new lowest fixed rate will be 5.49 per cent for three years. CBA to cut rates, experts say it's not enough. Picture: NewsWire / Luis Enrique Ascui However, ANZ will retain the lowest one and two-year fixed rates among the big four banks. National Australia Bank will also keep their crown of having the lowest three, four, and five-year fixed rates. data insights director Sally Tindall said while CBA's rate cuts bring it closer to its competitors, they're unlikely to send customers rushing to move their business. 'Fixed rates have been falling fairly consistently this year and we expect this activity will continue as banks price in the increasing likelihood of further cash rate cuts,' Ms Tindall said. 'CBA's fixed rate cuts aren't groundbreaking, but rather a bid to inch closer to its key competitors.' The move comes as all five major banks cut fixed rates after the RBA's decision earlier this month. Picture: NewsWire / Gaye Gerard Ms Tindall said the announced rate cuts also may not be enough to incentivise Aussies to lock into fixed rate home loans straight away. 'With just a 0.10 percentage point difference (between variable and fixed interest rates), and the possibility of further RBA cuts ramping up, it's hard to see many people jumping at the chance to lock up their mortgage for the next three years,' she said. 'We expect banks big and small will continue cutting fixed rates over the next few months. 'The majors might have to offer a fixed rate in the '4's' if they're serious about getting people to lock in their rate. Borrowers may need more incentive to Picture: NCA NewsWire / Luis Enrique Ascui 'If you're deciding between a fixed or variable rate, understand what might suit your finances and to some extent, your personality. When you make a decision, take the time to look for a competitive rate.' Five major lenders, excluding CBA, have cut fixed rates since the RBA's decision, while 20 lenders have already cut one fixed rate this month, rate tracking shows. A total of four lenders – BOQ, Community First Bank, Police Bank and Queensland Country Bank – are now offering at least one rate under 5 per cent at 4.99 per cent. Read related topics: Commonwealth Bank Of Australia Summer Liu Cadet Summer Liu started out in the legal and policy space, before taking on external stakeholder and media engagement roles. She is now a journalist with News Corp Australia's 2025 Editorial Cadet Program. Summer Liu
