Customer-owned banks slash home loan rates

By Harrison Astbury on December 04, 2020

Northern Inland Credit Union, BCU, Hunter United, and LCU all cut home loan interest rates recently, with a couple of new advertised rates under 2%.

Lenders have continued to lower their mortgage rates, despite December's cash rate remaining unchanged at 0.10%. 

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

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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

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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%. 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.

Northern Inland Credit Union introduced a couple of different home loans with an advertised interest rate below 2%, adding to the list of near 40 lenders to have already done so.

For example, the new 'Dream Value' home loan is 1.89% p.a. (2.28% p.a. comparison rate*).

The loan is variable, for owner occupiers paying principal & interest (P&I) with a maximum LVR of 60%, and is offered to new borrowers as a 'special offer' only. 

This is one of only a few products under 2% on a variable basi, as many are on a fixed basis instead. 

BCU also cut a fair few home loans for owner occupiers and investors alike.

The owner occupier two year fixed loan paying P&I was cut by 14 basis points down to 1.98% p.a. (3.76% p.a. comparison rate*).

For investors, the lowest rate to get a cut was the two year fixed loan paying P&I, cut by 21 basis points down to 2.18% p.a. (3.92% p.a. comparison rate*).

Meanwhile, Hunter United cut a few of its 'No Regrets' home loans by 10 basis points.

For first home buyers, the variable rate is now 2.69% p.a. (2.69% p.a. comparison rate*), and borrowers can have up to 90% LVR.

Source: Tenor GIF

LCU also introduced a home loan under 2% - its 'Introductory Home Loan' is 1.99% p.a. (3.12% p.a. comparison rate*).

It's a three-year fixed rate for new owner occupiers paying P&I. 

Reduce Home Loans also cut a few of its 'Home Owners Dream' loans by 25 basis points.

For example, its one-year fixed loan with a maximum LVR of 80% is now 1.94% p.a. (2.71% p.a. comparison rate*).

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Photo by Rob Laughter 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): 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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Harrison Astbury Harrison joined Savings in 2020. He is an experienced journalist, 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.