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Both Qudos Bank and Freedom Lend made adjustments to construction home loan rates in the past week in a possible bid to attract HomeBuilder grant recipients.
The $25,000 HomeBuilder grant is available for people building a home up to the value of $750,000 including land value.
Qudos Bank's cuts were:
- Construction Home Loan 80%: 50 basis point cut to 2.89% p.a. (2.93% p.a. comparison rate*)
- Construction Home Loan 90%: 50 basis point cut to 2.99% p.a. (3.03% p.a. comparison rate*)
Qudos Bank also made cuts to its investment construction loans, but investment properties are not eligible for HomeBuilder.
Meanwhile, Freedom Lend made a smaller cut by 3 basis points to its construction loan, down to 2.68% p.a. (2.70% p.a. comparison rate*)
This rate is applicable for both 80% and 90% LVR borrowers, which is unusual given lenders usually charge a higher rate if borrowers have a smaller deposit.
Compared to others in the construction loan market, this is how these two lenders stack up:
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.93% p.a. | 6.19% p.a. | $2,471 | Interest-only | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.69% p.a. | 5.71% p.a. | $2,899 | Principal & Interest | Variable | $0 | $350 | 80% | Disclosure | ||||||||||||
5.94% p.a. | 6.00% p.a. | $2,475 | Interest-only | Variable | $0 | $835 | 90% | |||||||||||||
6.24% p.a. | 6.31% p.a. | $2,600 | Interest-only | Variable | $0 | $450 | 80% | |||||||||||||
6.44% p.a. | 6.41% p.a. | $2,683 | Interest-only | Variable | $0 | $530 | 90% | |||||||||||||
6.74% p.a. | 7.51% p.a. | $2,808 | Interest-only | Variable | $20 | $644 | 90% | |||||||||||||
7.89% p.a. | 8.22% p.a. | $3,631 | Principal & Interest | Variable | $0 | $0 | 75% | |||||||||||||
7.19% p.a. | 6.90% p.a. | $2,996 | Interest-only | Variable | $0 | $1,212 | 90% | |||||||||||||
8.18% p.a. | 8.25% p.a. | $3,732 | Principal & Interest | Variable | $0 | $900 | 80% | |||||||||||||
5.94% p.a. | 6.36% p.a. | $2,978 | Principal & Interest | Variable | $395 | $null | 95% | |||||||||||||
5.18% p.a. | 5.63% p.a. | $2,739 | Principal & Interest | Variable | $350 | $0 | 90% |
The 2% barrier got breached again
Earlier in the week, challenger brand loans.com.au introduced a home loan with a variable interest rate below the 2.00% p.a. barrier, down to 1.99% p.a. (2.55% p.a. comparison rate*).
The sub-2% rate is available for the first year, before the rate then reverts to 2.57% p.a.
The online lender also launched a two year discounted variable rate of 2.09% p.a.(2.71% p.a comparison rate*) which reverts to 2.79% p.a. after two years.
Both products are limited to borrowers with a maximum LVR of 80%, with a maximum loan amount of $1 million.
This is how loans.com.au's 1.99% p.a. introductory home loan stacks up against other competitive variable-rate home loans on the market:
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.54% p.a. | 5.58% p.a. | $2,852 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.49% p.a. | 5.40% p.a. | $2,836 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.64% p.a. | 5.89% p.a. | $2,883 | Principal & Interest | Variable | $250 | $250 | 60% |
| Promoted | Disclosure | ||||||||||
5.64% p.a. | 5.89% p.a. | $2,883 | Principal & Interest | Variable | $248 | $350 | 60% |
| Disclosure |
At the end of June, Bank of Us also breached the 2.00% barrier with 1.99% fixed rates across a suite of fixed-rate terms, although these are only available for Tasmanian residents.
Hobart was one of the only capital cities to record a home price growth in the June quarter, according to a Domain report, and had the second-strongest home price growth at 10% on the year, with Sydney in first.
Community First and Horizon Bank continue customer-owned cutting trend
In continuing the trend of customer-owned institutions cutting home loan rates, on Monday Community First virtually scrubbed the fixed home loan deck, making a wide variety of cuts by 20 basis points.
Some of its freshly cut rates include:
- Fixed P&I 3 Years: Down to 2.49% p.a. (3.56% p.a. comparison rate*)
- Accelerator Package Fixed P&I 3 Years: Down to 2.34% p.a. (3.80% p.a. comparison rate*)
- Investment Fixed P&I 3 Years: Down to 2.79% p.a. (3.86% p.a. comparison rate*)
- Inv Accelerator Package Fixed 3 Years: Down to 2.64% p.a. (4.09% p.a. comparison rate*)
Yesterday, Horizon Bank cut a few fixed rates for investors and owner-occupiers by 30 basis points. The new rates are:
- Fixed 1 Year: Down to 2.69% p.a. (3.45% p.a. comparison rate*)
- Fixed 2 Years: Down to 2.69% p.a. (3.38% p.a. comparison rate*)
- Inv Fixed 1 Year: Down to 2.94% p.a. (3.69% p.a. comparison rate*)
- Inv Fixed 2 Years: Down to 2.94% p.a. (3.63% p.a. comparison rate*)
CommBank has reported a spike in fixed rate lending in recent months, with around 40% of all new owner-occupier loans at fixed rates.
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