Bank of Queensland has dropped its fixed home loan rates by up to 21 basis points, and is now a Queensland market leader in the increasingly popular two-year fixed term.
The two-year rate - lowered by 0.21% p.a. to 5.99% p.a. - is very attractive to many home buyers who want the extra security of a fixed rate but don't want to lock themselves into a five-year term with longer commitment and relatively higher rate.
BOQ has also lowered other fixed rate loans - its four- and five-year fixed rates dropped by 0.1% p.a. and 0.2% p.a. respectively to 6.49% p.a. and three-year fell by 0.15% p.a. to 6.2% p.a.
Its fixed rate business loans fell by the same margins.
BOQ's General Manager Retail, Donna Brown, said the cost of wholesale funds continued to drop, allowing the Bank to pass on benefits to borrowers.
"The two-year fixed rate is sort of the best of both worlds, providing borrowers with the benefits of added security and fixed repayments at a much lower rate than our standard variable rate of 6.57% p.a.
"With a recent Reuters survey revealing that most financial commentators believe interest rates will rise within the next 12 months, these new rates offer borrowers an added incentive to lock in now while they have the chance," Ms Brown said.