You will find the slashing of the fixed rate is more a reflection of the competition amongst lenders now the smaller lenders can get cheaper money, than a reflection of what the banks believe interest rates will do. The CBA set off a chain reaction as they all played catch up.
Long term fixed rates are good for the banks, and they are trying to lure as many to lock in with them as they can to maximise market share. Just remember 5 year fixed is a guaranteed revenue stream for them, with all charges and fees, the limited ability to pay it down and reduce your interest repayments, and the huge slug that penalises you paying out the loan including refinancing with another lender.
Loan books have very few 5+ year fixed loans so to stir up business its a good strategy to lure a few. If I held investment properties I would actually consider locking in a 5 year interest only at these rates, as there is not much more to squeeze out of this lemon.
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