Homestar Finance has slashed the rate on its two-year owner-occupier fixed rate by 14 basis points to a market leading rate of 1.74% p.a. (2.23% p.a. comparison rate*).
The offer is available from today, although with a Loan-to-Value Ratio (LVR) of 80%, borrowers will need a minimum 20% deposit to apply.
The loan has extra repayments of up to $20,000 available each year, free online redraws, multiple loan splits, and the option to make repayments weekly, fortnightly, or monthly.
According to Savings.com.au research, Homestar has knocked big four lender Westpac, who previously held the lowest two-year fixed rate, off its perch.
Greater Bank has the lowest fixed-rate on the market overall with a one year fixed-rate of 1.69% p.a (3.49% p.a. comparison rate), while UBank has the lowest three-year fixed rate at 1.75% (2.22% p.a.).
Homestar also boasts one of the lowest variable rates on the market at 1.79% p.a (1.84% p.a comparison rate).
While advertised rates can be attractive, the comparison rate and revert rate are often equally important when it comes to fixed-rate mortgages.
Greater Bank's comparison rate on its one-year fixed-rate may be considered quite high in today's market, while Homestar's comparison rate is still fairly competitive.
In the wake of the most recent Reserve Bank (RBA) cash rate cut in November, the majority of lenders have left variable rates untouched and instead made sweeping cuts to fixed rates.
With the RBA stating the cash rate is unlikely to be raised before the end of 2024, many borrowers could be considering whether now is a good time to fix.
Resimac slashes rates for self-employed borrowers
Fellow non-bank lender Resimac has cut interest rates and waived some fees on a range of its low-doc home loans in a bid to support self-employed Aussies to buy property or refinance.
Low-doc home loans are typically for the self-employed, and usually don't have the same required documentation needed for a home loan like recent payslips and pay summaries.
Resimac has dropped rates on its Prime Alt Doc owner-occupier making Principal and Interest repayments by 88 basis points to 2.99% p.a. (3.03% p.a).
Resimac loans are only available through a broker, and borrowers will need an 80% LVR.
The risk fee on the loan has also been waived.
Resimac General Manager Distribution Daniel Carde said the move was designed to provide self-employed borrowers with access to credit at a time it could make a material difference.
“There are many self-employed Australians who will need more support this year as they get back on their feet and transition back to normality after almost 12 months of disruption,” Mr Carde said.
“Refinance activity was particularly strong in 2020, however many self-employed borrowers were effectively shut out of the market due to the economic uncertainty caused by the pandemic.
"We’re looking to change that in 2021 by reducing our interest rates and removing almost all the entry costs on our range of Prime Alt Doc loans."
Photo by Jaye Haych on Unsplash
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