IMB, BOQ and others slash home loan interest rates

author-avatar By on February 26, 2021
IMB, BOQ and others slash home loan interest rates

It was a busy week of rate changes for challenger lenders, with IMB, BOQ, Bank of Us, Hume Bank, and Yard slashing home loan rates by up to 59 basis points.

IMB rate changes

Earlier in the week, some of IMB's rate changes came into effect, cutting by up to 20 basis points. Some key home loans to receive a haircut were: 

  • Residential Fixed P&I 5 Years: 20 basis point cut to 2.39% p.a. (2.83% p.a. comparison rate*)
  • Budget Home Loan P&I 80%: 3 basis point cut to 2.58% p.a. (2.64% p.a. comparison rate*)
  • Investment Fixed P&I 3 Years: 15 basis point cut to 2.49% p.a. (3.36% p.a. comparison rate*)

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

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.

BOQ rate changes

Bank of Queensland cut rates on a few home loans for investors, including:

  • Intro Rate Variable Investment 80%: 25 basis point cut to 2.84% p.a. (3.34% p.a. comparison rate*)
  • Intro Rate Variable Investment 90%: 10 basis point cut to 3.14% p.a. (3.39% p.a. comparison rate*)
  • Intro Rate Variable Investment IO 80%: 20 basis point cut to 2.99% p.a. (3.37% p.a. comparison rate*)
  • Intro Rate Variable Investment IO 90%: 10 basis point cut to 3.24% p.a. (3.41% p.a. comparison rate*)

Note as the name implies, these are two-year introductory rates. After the intro period ends, the advertised rate increases by between 3 and 43 basis points, depending on the home loan.

Bank of Us rate changes

The Tasmania-based lender made quite a few cuts, including one home loan by 59 basis points. Some key rate changes were:

  • OO FlexiDiscount 95%: 59 basis point cut to 3.10% p.a. (3.16% p.a. comparison rate*))
  • OO FlexiDiscount Fixed 1 Year 80%: 10 basis point cut to 2.19% p.a. (2.51% p.a. comparison rate*)
  • Inv FlexiChoice 1 Year 80%: 30 basis point cut to 2.69% p.a. (4.59% p.a. comparison rate*)

Hume Bank rate changes

Hume Bank cut many home loans by between 10 and 30 basis points. Some key ones were:

  • Residential Fixed 4 Years P&I: 10 basis point cut to 2.09% p.a. (3.50% p.a. comparison rate*)
  • Residential Fixed 4 Years P&I: 10 basis point cut to 2.39% p.a. (3.34% p.a. comparison rate*)
  • Flexi Low Rate 70% Special Offer: 20 basis point cut to 2.09% p.a. (2.09% p.a. comparison rate*)

Note with the last one, as it's a special offer, the offer can be withdrawn at any time.

Hume Bank is distinct in the market in that it is one of the only lenders to offer a home loan under 2% for building a home, called the 'HomeBuilder' loan.

Yard rate changes

The online non-bank lender cut a couple of investment home loans, including:

  • Investor Home Loan P&I 80%: 22 basis point cut to 2.45% p.a. (2.48% p.a. comparison rate*)
  • Investor Home Loan IO 80%: 15 basis point cut to 2.84% p.a. (2.93% p.a. comparison rate*)

Home lending surges in 2020 but investor lending is down 

The latest financial aggregates data from the Reserve Bank show strong growth in housing lending throughout 2020, up 3.6% in the year to January 2021 and 0.4% in just one month. 

Much of this growth was driven by owner-occupied home loans, which grew by almost 6% to $1.22 trillion (seasonally adjusted). 

Investment lending on the other hand struggled, falling by 0.17% over the year to around $665 billion. 

The total value of home loans in Australia is now around $1.88 trillion.


Photo by Peter Idowu 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.

*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 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.

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