A customer-owned bank just cut a fixed home loan down to 2.12%

author-avatar By
on June 12, 2020
A customer-owned bank just cut a fixed home loan down to 2.12%

By WikiWookie on Wikimedia Commons

BCU cut its two-year fixed home loan down to 2.12% p.a today (3.78% p.a comparison rate*).

This represents a 13 basis point (bps) cut, and for that rate you'll need to be an owner-occupier paying principal and interest (P&I). 

BCU's three-year fixed rate also saw an 11 basis point cut down to 2.16% p.a. (3.63% p.a. comparison rate*). 

BCU's 'OMG! Variable Rate P&I' loan also saw a 25 basis point cut to 2.69% p.a. (2.69% p.a. comparison rate*)

These cuts generally follow on from other lenders nudging closer to the unicorn 1% advertised rate threshold, while some seem to be cutting the most for 'safer' borrowers, like those refinancing or those who have a high deposit.

Back to BCU, and the home loans that saw the biggest cuts were to its investment loans, paying both interest only (IO) and P&I.

  • Investment Fixed P&I 2 Years: 65 basis point cut to 2.39% p.a. (3.96% p.a. comparison rate*)
  • Investment Fixed P&I 3 Years: 62 basis point cut to 2.44% p.a. (3.82% p.a. comparison rate*)
  • Investment Fixed IO 2 Years: 57 basis point cut to 2.49% p.a. (3.98% p.a. comparison rate*)
  • Investment Fixed IO 3 Years: 54 basis point cut to 2.54% p.a. (3.85% p.a. comparison rate*)

Why the high comparison rate? One of the biggest factors is it assumes after the fixed term ends, you'll go on to the standard variable rate (SVR), rather than refinance or ask for a better deal.

BCU's investment P&I SVR is 4.30% p.a. (same comparison rate*).

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner-occupiers.

Lender

Variable
More details
UNLIMITED REDRAWS
UNLIMITED REDRAWS

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

    Variable
    More details
    100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
    • No upfront or ongoing fees
    • 100% full offset account
    • Extra repayments + redraw services
    100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

    Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

    • No upfront or ongoing fees
    • 100% full offset account
    • Extra repayments + redraw services
    Variable
    More details
    REFINANCE ONLY
    • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
    REFINANCE ONLY

    Variable Rate Home Loan – Refinance Only

    • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
    Variable
    More details
    AN EASY DIGITAL APPLICATION
    • No ongoing fees - None!
    • Unlimited additional repayments
    • Easy online application, find out if you're approved quick!
    • Redraw- Access your additional payments if you need them
    • Use the app to get loan insights to help you pay off your home loan faster
    AN EASY DIGITAL APPLICATION

    Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

    • No ongoing fees - None!
    • Unlimited additional repayments
    • Easy online application, find out if you're approved quick!
    • Redraw- Access your additional payments if you need them
    • Use the app to get loan insights to help you pay off your home loan faster
    Variable
    More details
    • Low rate home loan with added benefits, add offset for 0.10%
    • Save thousands & make an environmentally conscious choice on your loan for homes less than 12 months old
    • Get a 7.0 star NatHERS rating or higher for up to 1.59% discount on your variable rate home loan T&Cs apply

    Green Home Loan (Principal and Interest)

    • Low rate home loan with added benefits, add offset for 0.10%
    • Save thousands & make an environmentally conscious choice on your loan for homes less than 12 months old
    • Get a 7.0 star NatHERS rating or higher for up to 1.59% discount on your variable rate home loan T&Cs apply

    Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of August 20, 2022. View disclaimer.

    Newcastle Permanent raises home loans by 10 basis points

    On Wednesday, Newcastle Permanent raised the interest rate on many of its home loans paying both IO and P&I for owner-occupiers and investors.

    This theme of lenders bumping up the rate a little isn't new, given the likes of ANZ and ME Bank did so not too long ago.

    For Newcastle Permanent, some of the 10 basis point bumps are below:

    • Investment Fixed P&I 1 Year: Now 3.09% p.a. (4.49% p.a. comparison rate*)
    • Investment Fixed P&I 2 Years: Now 3.14% p.a. (4.36% p.a. comparison rate*)
    • Residential Fixed P&I 1 Year: Now 2.49% p.a. (4.12% p.a. comparison rate*)
    • Residential Fixed P& 2 Years: Now 2.54% p.a. (3.98% p.a. comparison rate*)

    Three, four and five-year fixed rates also saw a rise, so too did its 'Premium Plus Package' home loans.

    In the residential space, you can expect to pay a 50bps premium by going interest-only, while for investors the advertised rate tends to stay the same.




    Disclaimers

    The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

    Latest Articles

    author-avatar
    Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

    Be Savings smart.
    Subscribe for free money newsletters.

    By subscribing you agree
    to the Savings Privacy Policy