Aussie, Gateway Bank, ME Bank and more cut home loan rates

Emma Duffy By on September 27, 2019
 
home loan rate cut

Photo by bruce mars on Unsplash

The Reserve Bank’s monthly meeting is just around the corner with a rate cut almost a certainty, but that hasn’t stopped lenders cutting rates for new customers as the home loan war heats up.

Home loan interest rates are dropping left, right and centre, thanks to the most recent RBA rate cuts back in June and July.

With an October rate cut looking more and more certain, these are likely not to be last home loan rate cuts we’ll see.

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Aussie home loan rate cuts

Aussie has slashed rates on a number of its fixed and variable home loan products, with rates as low as 2.99% p.a. (comparison rates differ, see below).

Changes to fixed rates:

  • Two-year Select Basic fixed for borrowers making principal and interest (P&I) repayments with up to 80% LVR have been cut by 9 basis points from 3.08% p.a. to 2.99% p.a. (3.38% p.a. comparison rate*)
  • Two-year Select Basic fixed for borrowers making P&I repayments with over 80% LVR have been cut by 9 basis points from 3.08% p.a. to 2.99% p.a. (3.38% p.a. comparison rate*)
  • Three-year Select Basic fixed for borrowers making P&I repayments with up to 80% LVR have been cut by 9 basis points from 3.08% p.a. to 2.99% p.a. (3.34% p.a. comparison rate*)
  • Three-year Select Basic fixed for borrowers making P&I repayments with over 80% LVR have been cut by 9 basis points from 3.08% p.a. to 2.99% p.a. (3.64% p.a. comparison rate*)
  • Two-year Select Standard fixed for borrowers making P&I repayments has been cut by 9 basis points from 3.08% p.a. to 2.99% p.a. (3.88% p.a. comparison rate*)
  • Three-year Select Standard fixed for borrowers making P&I repayments has been cut by 9 basis points from 3.08% p.a. to 2.99% p.a. (3.82% p.a. comparison rate*)

Changes to variable rates:

  • Select Basic variable for borrowers making P&I repayments with a $500k loan size and 80% LVR has been cut by 10 basis points from 3.54% p.a. to 3.44% p.a. (3.45% p.a. comparison rate*)
  • Select Standard variable for borrowers making P&I repayments with a $500k loan size and 80% LVR has been cut by 10 basis points from 3.54% p.a. to 3.44% p.a. (3.64% p.a. comparison rate*)

Gateway Bank home loan rate cuts

Gateway Bank has been busy cutting rates on a number of their fixed home loans for investors and owner-occupiers by up to 80 basis points.

Changes to investor home loans:

  • One-year Premium Investment fixed for borrowers with a $150k loan size has been cut by 70 basis points from 4.09% p.a. to 3.39% p.a. (4.21% p.a. comparison rate*)
  • One-year Premium Investment fixed for borrowers making interest-only repayments with a loan size of $150k+ has been cut by 80 basis points from 4.29% p.a. to 3.49% p.a. (4.22% p.a. comparison rate*)

Changes to owner-occupier loans:

  • Low Rate Essentials has been cut by 20 basis points from 3.39% p.a. to 3.19% p.a. (3.22% p.a. comparison rate*)
  • Low Rate Essentials with 85% LVR has been cut by 20 basis points from 3.42% p.a. to 3.22% p.a. (3.25% p.a. comparison rate*)
  • Three-year Premium Residential fixed for a $150k loan size has been cut by 40 basis points from 3.69% p.a. to 3.29% p.a. (3.87% p.a. comparison rate*)

ME Bank home loan rate cuts

The online lender announced cuts to its variable home loan offers for investors by up to 49 basis points.

The cuts for P&I and IO loans are effective from 24 September.

  • Flexible Home Loan Member Package for investors making P&I repayments with under 80% LVR has been cut by 14 basis points from 3.77% p.a. to 3.63% p.a. (4.06% p.a. comparison rate*)
  • Basic Home Loan for investors making P&I repayments with under 80% LVR has been cut by 49 basis points from 4.17% p.a. to 3.68% p.a. (3.70% p.a. comparison rate*)
  • Flexible Home Loan Member Package for investors making IO repayments has been cut by 23 basis points from 4.12% p.a. to 3.89% p.a. (4.19% p.a. comparison rate*)
  • Basic Home Loan for investors making IO repayments with under 80% LVR has been cut by 45 basis points from 4.34% p.a. to 3.89% p.a. (3.79% p.a. comparison rate*)

Who else has cut home loan rates this week?

Commonwealth Bank got in on the action earlier in the week, cutting fixed home loan interest rates by up to 90 basis points.

Owner-occupied borrowers paying principal and interest (P&I) can now get fixed rates with Commbank starting from 3.29% p.a, while interest-only (IO) borrowers can get fixed loans starting from 3.79% p.a.

But even though the cuts from the big four bank sound pretty big, the rates are still much higher than those offered by several other lenders:

Company Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
 
1yr Fixed Rate 3.44% 4.93% $2,229 More details
Great Rate Discount Fixed 1yr 2.79% 3.94% $1,641 More details
3yrs Fixed OO P&I 2.98% 4.39% $1,682 More details
Fixed Rate 1yr 2.98% 4.65% $1,682 More details
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
1yr Fixed Rate
3.44% 4.93% $2,229
More details
Great Rate Discount Fixed 1yr
2.79% 3.94% $1,641
More details
3yrs Fixed OO P&I
2.98% 4.39% $1,682
More details
Fixed Rate 1yr
2.98% 4.65% $1,682
More details

Base criteria of: a $400,000 loan amount, fixed, principal and interest (P&I) owner-occupier home loans with an LVR (loan-to-value) ratio of at least 80%. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 26 September 2019. View disclaimer.

Leading fintech lender Loans.com.au released two new investment home loan products on Monday, the Smart Investor home loans.

The Smart Investor loans both boast an interest rate of 3.39% p.a. (3.41% comparison rate*), and have no ongoing or monthly fees.

The only difference between the two products is that one requires principal and interest repayments, the other is interest-only.

Despite this, the interest rate is actually the same for both products, making the interest-only rate one of the lowest investment rates of its kind on the market at the time of writing.

Company Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
 
Smart Investor Home Loan P&I 80% 3.39% 3.41% $1,772 More details
Low Rate Inv Loan w/Offset 3.40% 3.42% $1,774 More details
Achieve Var Inv P&I Special 3.49% 3.54% $1,793 More details
Inv Simplicity Plus P&I Special 3.66% 3.70% $1,850 More details
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
Smart Investor Home Loan P&I 80%
3.39% 3.41% $1,772
More details
Low Rate Inv Loan w/Offset
3.40% 3.42% $1,774
More details
Achieve Var Inv P&I Special
3.49% 3.54% $1,793
More details
Inv Simplicity Plus P&I Special
3.66% 3.70% $1,850
More details

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) investment home loans with an LVR (loan-to-value) ratio of at least 80%. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. *Rates correct as at 23 September 2019. View disclaimer.

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 2018. 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 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

Some providers’ products may not be available in all states.

In the interests of full disclosure, Savings.com.au 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 includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure. The interest rate per annum is based on a loan credit of $150,000 and a loan term of 25 years.

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Emma Duffy
Emma Duffy joined Savings.com.au as a Finance Journalist in 2019 after spending a year as the editor of The Real Estate Conversation. She's most passionate about improving the financial literacy of millennials by writing about complex financial topics in a way that's easy for the average Joe (or Jill) to understand.
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