Macquarie Bank has cut interest rates on three of its fixed-rate home loans as the highly anticipated first Reserve Bank meeting of the year draws closer.

Macquarie, the nation’s fifth-largest lender, today reduced the rate on its one-year fixed term by 0.16 per cent, down to 5.69 per cent.

It also trimmed its two and three-year fixed rates to 5.55 per cent, a cut of 0.14 per cent.

While not the lowest rates on the market, Macquarie’s new offerings are better than those of all of the big four banks, and financial comparison site Canstar said the move could spur a response from Australia’s larger lenders.

“Today’s cuts from Macquarie Bank might be relatively minor but they could fire up competition in the fixed rate market as we edge closer to a cash rate cut,” Canstar data insights director Sally Tindall said.

“While fixed rates often reflect the cost of wholesale funding, the prospect of cash rate cuts in the next few months is likely to encourage more lenders to take the knife to their fixed rates.”

The Reserve Bank will deliver its first interest rate decision of the year in four weeks’ time, on February 18.

While there is no clear consensus on whether Governor Michele Bullock and her board will reduce the cash rate for the first time since November 2020, economists have become increasingly confident of a cut in recent weeks.

“The fixed-rate market has been relatively quiet over the summer break, with more lenders hiking these rates in the month of December than cutting,” Tindall said.

“However, this move from Macquarie could push other lenders into taking a look at the competitiveness of their fixed rates in the lead-up to the RBA’s next meeting…

“Right now, the majority of borrowers are opting to stay on a variable rate, most likely in the hope we’ll see a flurry of cash rate cuts that will deliver relief in the months ahead.”

Just how likely a rate cut is will be made clearer next Wednesday, when quarterly inflation statistics for December – which is among the most important data for the RBA to consider in its decision – will be released.