You may have seen reports recently of banks lowering variable rates on home loans – often not long after raising them after the Reserve Bank of Australia raised the official base rate.

The Commonwealth Bank cut its lowest variable rate by 0.15 percent on Thursday, ME Bank also cut some of its variable rates on Tuesday, Macquarie Bank cut variable rates on home loans by up to 25 basis points last week and ANZ took one in May similar step.

But RateCity’s research director, Sally Tindall, warns there’s a catch.

“The big catch with these rate cuts is that they are usually reserved for new customers,” she told news.com.au.

“These cuts show that competition in the variable home loan market remains hot despite the RBA’s rate hikes.”

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If you’re an existing customer of one of these banks, you may be disappointed to hear that new customers are being offered a lower interest rate. But Mrs Tindall has some advice for you.

“If your bank is offering lower interest rates to new customers, pick up the phone and ask them where their loyalty lies,” she said.

“If they don’t budge, it might be time to pick up your mortgage and take it to a lender who’s willing to give you a competitive interest rate.

“If you’re using an increasing variable rate, you can take steps to minimize the damage by refinancing to a more competitive lender.

“Most adjustable rate customers are now facing significantly higher repayments, with more rate hikes to come in the coming weeks.

“However, customers who are ready to buy their home loans may be able to secure a rate cut to soften the blow.”

The Reserve Bank of Australia raised official interest rates by 50 basis points in June, following a 25 basis point hike in May.

A third straight rate hike is expected next Tuesday after the RBA board holds its July meeting.

Homeowners were little reassured when RBA Governor Philip Lowe said at a recent UBS panel in Zurich that it wouldn’t be as big as many feared, claiming a 0.75 percentage point rate hike this time “isn’t on.” the table”. .

The RBA will continue to raise interest rates in the coming months to slow inflation.

After the RBA’s first rate hike in May, Viktor Shvets, Macquarie’s global strategy chief, said he believed central banks would consider another rate cut within 12 months.

“I have believed for some time that there is a much higher probability of both fiscal and monetary policy easing than tightening over the course of 2023 and 2024,” he told the Macquarie Australia Conference Financial review.

“What will happen is when the Federal Reserve starts tightening – through quantitative tightening and rate hikes – and interest rates move ever closer to neutral rates, asset price volatility will increase significantly.

“When that happens, the index of financial conditions will go through the roof and by that time inflation and growth rates will disappear and the Federal Reserve will have no choice but to back down.”