Julia Gorges Australian Open 2012, by Max Pixel
Big four bank ANZ on Wednesday further slashed interest rates across a variety of fixed-rate loans.
One of the bank's latest offers is a 2.29% p.a. (3.89% p.a. comparison rate*) 3-year fixed owner occupier home loan for principal & interest (P&I) borrowers as part of its 'Breakfree' package.
It represents a cut of 59 basis points, with the bank previously offering 2.88% p.a. for that product.
Various other residential loans to see a 59 basis point cut were:
- Breakfree Residential Fixed 1 Year 150k+: 2.39% p.a. (4.16% p.a. comparison rate*)
- Residential (non package) Fixed 3 Years: 2.44% p.a. (3.95% p.a. comparison rate*)
Investment loans also saw some love, with the 59 basis point cuts going to:
- Breakfree Investment Fixed 3 Years 150k+: 2.49% p.a. (4.37% p.a. comparison rate*)
- Breakfree Investment Fixed 1 Year 150k+: 2.59% p.a. (4.71% p.a. comparison rate*)
- Investment (non package) Fixed 1 Year: 2.74% p.a. (4.83% p.a. comparison rate*)
Many other fixed loans of both the residential and investment persuasions were also cut between 19 and 49 basis points.
This week's fresh round of cuts follow the bank's introduction on 20 March of its lowest fixed-rate home loan on-record - a two-year fixed rate of 2.19% p.a. (4.00% p.a. comparison rate*) - for owner occupiers paying principal and interest.
The special two year rate was announced as part of the bank's immediate response to the Reserve Bank of Australia's emergency cash rate cut.
The latest cuts also bring the bank closer to challenger banks, and ahead of main rivals CommBank, Westpac and NAB in many cases, with advertised rates hovering close to the elusive high 1.00% range.
As to the question if it's a 'good time' to fix your home loan, the opinion is mixed, with experts predicting fixed loans are being cut to entice borrowers to lock themselves in, so banks can ensure cash flow during the coronavirus crisis.
While many variable rate loans now have higher advertised rates than fixed-rate home loans, when it comes to the comparison rate variable-rate loans do still appear to have the wood over fixed-rates.
Fixed rate loans tend to have higher comparison rates in part because at the end of the fixed-term the loan's rate reverts to a much higher variable rate.
The table below displays a selection of home loans with some of the lowest interest rates on the market for owner occupiers.
Smart Booster Home Loan
Product Features
- Discount variable for 1 year <=80% LVR
- No ongoing fees
- Unlimited redraw facility
Monthly repayments: $1,476
Advertised
Rate (p.a.)
1.99%
Comparison
Rate (p.a.)
2.47%
Product Features
- Discount variable for 1 year
- No ongoing fees
- Unlimited redraw facility
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%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
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): Credit Union Australia, 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.
*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.
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