AMP cuts home loan rates for interest-only borrowers

By Harrison Astbury on March 12, 2021

AMP cut interest rates for a couple of owner occupier loans paying interest-only by 30 basis points this morning.

The cuts apply to the variable-rate 'Professional Package' series, for owner occupiers paying interest-only borrowing more than $500,000, with different comparison rates applicable to different LVRs.

These different rates are as follows: 

• =60% LVR: 30 basis point cut to 2.99% p.a. (3.04% p.a. comparison rate*)
• 60-80% LVR: 30 basis point cut to 2.99% p.a. (3.10% p.a. comparison rate*)

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

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Smart Booster Home Loan

Product Features

• Discount variable for 2 years <=80% LVR
• No ongoing fees
• Unlimited redraw facility

Monthly repayments: $1,448

Advertised
Rate (p.a.)

1.85%

Comparison
Rate (p.a.)

2.21%

Product Features

• Discount variable for 2 years <=80% LVR
• No ongoing fees
• Unlimited redraw facility

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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 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 latest mortgage deferral data for January indicates AMP had about 1% of its total residential loan book on deferred payments, totalling 919 individual facilities. 

However, that figure jumps for interest-only borrowers - about 10% of all AMP borrowers on interest-only payments were on deferred payments.

Interest-only borrowers also had a 19% share of all residential loan deferrals at AMP.

An AMP Bank spokesperson told Savings.com.au interest-only payments provide greater flexibility.

"While our owner occupier principal and interest home loan rates are already very competitive in the market, today’s reduction to the owner occupier interest only home loan will help provide more flexibility and greater options for clients – during what has been a challenging period for many Australians," they said.

Bankwest also cut a couple of investor home loans, as detailed below:

• Investor 'Complete' Fixed P&I 5 Years: 61 basis point cut to 2.68% p.a. (3.85% p.a. comparison rate*)
• Investor Fixed P&I 5 Years: 61 basis point cut to 2.88% p.a. (4.45% p.a. comparison rate*)

These home loans are applicable for borrowers with up to 90% LVR.

Earlier in the week, Westpac cut to its 'lowest ever' home loan rate, as did its subsidiaries St. George, Bank SA and Bank of Melbourne. 

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Photo by Naseem Buras on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

• The big four banks are: ANZ, CBA, NAB and Westpac
• The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
• The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
• If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

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.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*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.

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Harrison Astbury Harrison is a Senior Finance Journalist, and joined Savings in 2020. Prior to joining Savings, 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 is passionate about informing readers on the strings being pulled in high-up places and how it affects everyday Australians.