Mortgage interest rates continue to fall in australia experts

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HOME loan interest rates are continuing to tumble with dozens of deals getting even cheaper despite the cash rate staying on hold.

About 180 fixed and variable rate loans fell in September and now a large chunk of offers are well below the four per cent mark with expectations of further drops in the coming months.

The Reserve Bank of Australia meets on Tuesday for the first time under new governor Philip Lowe, who is expected to keep the cash rate on hold at the record low of 1.5 per cent.

But latest analysis by financial comparison website RateCity shows in September more than 100 variable rate loan deals plummeted by an average of 0.17 per cent.

And on fixed-rate loan deals more than 70 offers fell dropping by an average of 0.23 per cent.

St George senior economist Hans Kunnen said while the cash rate is likely to stay on hold this month, another cut is imminent which would take it to 1.25 per cent.

We suggest theyll be another cash rate cut in November, we still have very low inflation and domestic demand is weak,’ he said.

Mr Kunnen said Australias cash rate remained much higher than other countries including the US, which has a cash rate of 0.5 per cent.

Low inflation figures have also remained of concern to the RBA board.

RateCitys database shows on a $300,000 30-year owner occupier loan the lowest variable rate deal is offered by Reduce Home Loans at 3.35 per cent.

On a three-year fixed deal the best offer is by Bank of Queensland at 3.59 per cent.

RateCity spokesman Peter Arnold expects more mortgage deals to creep downwards in the coming months.

While the cash rate is on hold we are still getting home loan cuts as theres so much competition to get new customers,’ he said.

If youve been sitting on a rate its as good a time as ever to get a good deal as theres a lot of the banks fighting hard for customers.

Mr Arnold said owner occupier customers should definitely be scoring deals below the four per cent mark if they have a decent deposit or some equity in their home and said it would open them up to the hottest rates in the market.