Lower fixed rates
No fewer than three articles in this morning's Australian newspaper about the Reserve Bank imploring banks to get lending again.
Whether it's stated explicitly or not, lending for housing needs to be stabilised.
One welcome piece of news is that the rising rates story has gone from hot topic to fizzer, and this in turn should allow banks to drop their mortgage rates.
Australia's 10 year bond yield sunk below 1.9 per cent in the past day, continuing a serious decline since November.
The US Federal Reserve appears to have abandoned its course for hiking rates further, and meanwhile funding costs in Australia are falling.
With the prevailing decline in market swap rates, this should clear the path for banks to offer lower fixed rate mortgages.
This has already been happening, in fact.
Well over 40 lenders have slashed fixed rate mortgages recently, with Suncorp the latest bank to join the charge this morning.
Suncorp dropped its 5 year fixed rates for interest-only and principal and interest mortgages by a thumping 70 basis points for 90 per cent LVR loans.
3 year fixed rates were also cut by 20 basis points.
One small step closer to balancing the lending market.
