While financial regulators consider their options for putting the brakes on the runaway housing finance market, lenders are doing their best to keep the momentum going.
Canstar reported that five lenders cut variable mortgage rates in the past week and fixed mortgage rates reached a new low.
Yesterday, the Council of Financial Regulators issued its quarterly statement, saying it was "mindful that a period of credit growth materially outpacing growth in household income would add to the medium-term risks facing the economy .... Against this background, the Council discussed possible macroprudential policy responses.
"APRA will continue to consult with the Council on the implementation of any particular measure.
"Over the next couple of months, APRA also plans to publish an information paper on its framework for implementing macroprudential policy."
Adelaide Bank, Aussie Home Loans, Australian Unity Bank, Greater Bank and Qudos Bank cut variable rates last week, with reductions of as much as 30 basis points, Canstar analysis shows.
There were cuts to investment and owner occupier loans, interest-only and principal and interest. The rates cuts being offered to investors were greater overall than those for owner occupiers.
Greater Bank is offering the lowest rate among the lenders that cut rates last week, a discount variable rate of 2.19 per cent for owner occupiers paying P&I – down from 2.39 per cent.
Adelaide Bank made the biggest cuts – 31 bps on P&I investor loans and 21 bps in interest-only investor loans.
Last week, Greater Bank cut its one and two-year fixed mortgage rates for owner occupiers paying principal and interest to 1.59 per cent. The one-year rate was cut by 10 basis points and the two-year rate by 20 bps.
Canstar said these rates are the lowest in the market. Greater also cut the one and two-year rates for owner occupiers paying interest only – to 1.69 per cent.
The lowest variable mortgage rate in the market is 1.77 per cent, which Reduce Home Loans is offering on loans with LVRs of up to 60 per cent.