Bendigo, Adelaide, Citi and Heritage Banks slash home loan rates

author-avatar By on April 03, 2020
Bendigo, Adelaide, Citi and Heritage Banks slash home loan rates

Photo by Scott Webb on Unsplash

It was another busy week for home loan interest rate cuts, with Bendigo & Adelaide Bank, Citi, Heritage Bank and others chopping the dinosaur.

ANZ cut earlier in the week, making it twice in one week ANZ made some changes to its home loan products.

Other institutions to cut home loan interest rates in the past week were Bendigo and Adelaide Banks, Citi, Heritage, Suncorp and others such as AMP, Bank Australia, and BCU. 

Fixed home loans tend to be getting most of the love these days, but overall, the variable market is still very competitive, which you can see below in the owner-occupied principal & interest (P&I) segment.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayment
 
Purchase/Refi 80% Smart Booster Home Loan
1.99% 2.55% $1,476 Go to site
2.59% 2.55% $1,599 Go to site
Budget Home Loan OO P&I
2.68% 2.74% $1,618 Go to site
2.89% 2.89% $1,663 Go to site

Base criteria of: a $400,000 loan amount, variable, 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. 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 03 August 2020. View disclaimer.

Adelaide Bank rate cuts

Adelaide Bank made quite a raft of cuts to its fixed loans for both owner occupiers and investors. 

The biggest cut was by 90 basis points, applied to the SmartSaver Fixed interest-only loan for one year - down to 2.79% p.a. (2.85% p.a. comparison rate*).

Other key cuts include:

  • SmartFix P&I 2 Years: 60 basis point cut to 2.29% p.a. (2.95% p.a. comparison rate*)
  • Investment SmartFix P&I 2 Years: 70 basis point cut to 2.59% p.a. (3.25% p.a. comparison rate*)

The main difference between SmartFix and SmartSaver is that SmartFix has an attached offset account.

Bendigo Bank rate cuts

Bendigo Bank - part of the same family as Adelaide Bank - also made a wide variety of cuts, mainly to fixed loans. 

The biggest cut was by 65 basis points, which was the Basic Fixed Owner Occupied P&I 1 Year loan, down to 2.34% p.a. (3.13% p.a. comparison rate*). Other key cuts were:

  • Connect Package Fixed Owner Occupied 1 Year 250k+: 65 basis point cut to 2.59% p.a. (4.04% p.a. comparison rate*)
  • Basic Investment Fixed P&I One Year: 65 basis point cut to 2.64% p.a. (3.47% p.a. comparison rate*)

The Connect Package allows borrowers to 'connect' up to three additional products, including a transaction account, car insurance, credit card and more, with a monthly service fee of $20.

Citi rate cuts

Citi cut rates by up to 40 basis points.

The 40 basis point cut applied to a few loans, including the Mortgage Plus Standard Fixed 1 Year (P&I 80% LVR 350k+) loan, down to 2.49% p.a. (3.20% p.a. comparison rate*).

Other key cuts included:

  • Investment Standard Fixed P&I One Year 80% 350k+: 30 basis point cut to 2.79% p.a. (5.02% p.a. comparison rate*)
  • Standard Fixed P&I 5 Years 80% 350k+: 20 basis point cut to 2.79% p.a. (4.30% p.a. comparison rate*)

One of the reasons for the higher comparison rate on fixed loans, like with all banks and lenders, is that the comparison rate assumes the borrower will accept the lender's revert rate at the end of the fixed period, instead of refinancing. 

Heritage Bank rate cuts

Heritage Bank also cut rates by up to 40 basis points, which includes the Residential Fixed 2 Year loan, down to 2.59% p.a. (4.26% p.a. comparison rate*).

Other key cuts were:

  • Home Advantage Residential Fixed 1 Year 150k+: 30 basis point cut to 2.59% p.a. (3.40% p.a. comparison rate*)
  • Home Advantage Investment Fixed P&I 1 Year 150k+: 29 basis point cut to 2.89% p.a. (3.65% p.a. comparison rate*)

'Home Advantage' is a packaged loan series, allowing customers to bundle credit cards, lines of credit, and an offset account. 

Suncorp rate cuts

Suncorp cut rates by up to 35 basis points, which encompassed a variety of fixed loans, including the Home Package Plus P&I loan with an 80% LVR for 2 years.

This rate was reduced to 2.29% p.a. (3.32% p.a. comparison rate*). Other cuts included:

  • Owner Occupied Fixed P&I 2 Years: 35 basis point cut to 2.74% p.a. (4.75% p.a. comparison rate*)
  • Home Package Plus Investment <80% Fixed P&I 3 yrs: 15 basis point cut to 2.79% p.a. (3.65% p.a. comparison rate*)

It's important to note that some of these home loans are discounted by up to 45 basis points as a 'special offer', which means the offer can be withdrawn at any time. 

Other rate cuts

Numerous other banks and lenders cut home loan rates in the past week, with the more noteworthy ones being:

AMP

AMP cut home loan rates on a variety of products and was one of the few to give love to variable home loans.

AMP cut variable rates by up to 25 basis points, with one of them being the Essential Home Loan 80% 100k product, as a 'special offer', down to 2.77% p.a. (2.80% p.a. comparison rate*).

As usual, special offers can be withdrawn at any time.

Bank Australia

The bank that promises to 'bank responsibly' made a massive cut by 105 basis points in the past week.

This was applied to quite a few home loans, including the Basic Fixed 1 Year 80% LVR loan, down to 2.34% p.a. (3.17% p.a. comparison rate*). 

BCU

Bananacoast Credit Union cut by up to 66 basis points.

This was applied to its Fixed Residential Loans for 2 and 3 Years, paying P&I. The rates are:

  • 2 Years Fixed: 2.25% p.a. (3.80% p.a. comparison rate*)
  • 3 Years Fixed: 2.27% p.a. (3.66% p.a. comparison rate*)

Other loans to receive cuts were its 'OMG' range of products for both owner occupiers and investors: yes - 'Oh My God'. 


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 2019. 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. 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 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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author-avatar
Harrison joined Savings in 2020. He is a journalist with more than four years of experience, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.

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