INTEREST rates on fixed and variable-rate home loans are falling despite the nation’s cash rate failing to budge in 14 months.

Savvy home loan customers who haven’t locked in their rates will be pleased they waited as more than 80 lenders have dropped their rates in the past month on nearly 100 fixed rate mortgages.

Some lowered them by as much as 0.7 per cent.

Variable rate home loans are also continuing to fall with dozens of mortgage rates decreasing by up to 30 basis points, new figures by financial comparison site found.

MORE: Home loan customers on a mission to smash mortgages

The Reserve Bank of Australia kept the cash rate on hold at 2.5 per cent yesterday with Governor Glenn Stevens highlighting the sharp fall to the Australian dollar.

He said the global economy was ‘continuing at a moderate pace’ and the nation’s ‘weakening property market’ was an upcoming challenge.

RELATED: Australian house prices could fall spokeswoman Michelle Hutchison said lenders still had leeway to drop loan rates even further as they continued to hover at historically low levels.

‘Variable rates generally don’t move out of cycle but it really does show that lenders do have room to move,” she said.

‘They haven’t passed on all the cash rate cuts since they started dropping rates since November 2011 so they still have room.

‘Lending has got cheaper for the banks and it’s good to see some are passing on rate cuts to their home loans.’

Ms Hutchison said patient borrowers would have the last laugh now as historically low rates continue to drop.

According to their database the lowest available two-year fixed rate is 4.29 per cent, lowest three-year rate is 4.39 per cent and five-year fixed rate is 4.79 per cent.

All three rates belong to the Newcastle Permanent.

The lowest advertised variable rate is 4.54 per cent, offered by

But 1300homeloan director John Kolenda said home loan customers would be lucky to see many more fixed rate falls in the coming months despite predicting a further cash rate fall.

‘It would be very difficult to see that you would get a much better deal over the next six months,” he said.

‘I don’t think rates will rise and I think for the next six to 12 months I still think there is a 50 per cent change of rates coming down again.’

HSBC’s chief economist Paul Bloxham said the RBA is unlikely to cut rates further and he expected a rate rise mid-next year conditional to the Australian dollar falling further.

Posted by News Limited Network on 8th October, 2014