ANALYSIS: Why banks are slashing fixed-rate home loans despite interest rate rises
Both CBA and Westpac slashed their four-year loans to 4.99 per cent. In CBA's case, that lopped around 1.6 percentage points off its previous level so that it now sits well below the variable rate of 5.8 per cent.The more likely explanation is that as the chances of a recession continue to grow, the interest rate trajectory into orbit that most experts were predicting just weeks ago is being hurriedly dismantled and the prospect of lower rates next year is rising.
It is a strategy that runs completely counter to central bank ethos: to scope out the future, act ahead of the curve, telegraph every move and take steady and deliberate action to keep the economy on an even keel. Sellers, alarmed at the prospect of not shifting their properties, are retreating with national listings off 8.4 per cent this past weekend nationally, compared to the same time last year, with Sydney bearing the brunt with a 15 per cent drop.drastically reducing the amount they will lend to new borrowers
According to Jonathon Mott — an analyst at investment bank Barrenjoey — if the RBA continues to hike rates at the speed of recent months, a large number of new Australian homeowners could end up in harm's way.
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