Loans.com.au cuts Smart Home Loan rate

author-avatar By
on February 18, 2020
Loans.com.au cuts Smart Home Loan rate

Photo by Coni Wang on Unsplash

Online lender loans.com.au has cut the interest rate on one of its premiere home loan products - the Smart Home Loan - by 10 basis points today.

The new Smart Home Loan 75, available for owner-occupiers, has had its interest rate for principal and interest repayments lowered from 2.88% p.a. to 2.78% p.a (2.80% p.a. comparison rate*). 

This interest rate cut comes despite there being no reduction in the cash rate from the Reserve Bank of Australia (RBA) this month. 

However, this new interest rate is only available for buyers with an LVR (loan-to-value ratio) of 75% or lower, which means a deposit of least 25% of the property's value. 

This new 2.78% p.a. rate is now one of the lowest variable interest rates on the market for owner-occupiers, competing with the home loans offered by other low-rate lenders such as Athena:   

Lender

Variable
More details
UNLIMITED REDRAWS
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWS

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO ONGOING FEES

Yard PAYG Home Loan (Principal and Interest) LVR ≤ 80%

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster

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%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *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. Rates correct as of August 7, 2022. View disclaimer.

Other key aspects of this home loan include: 

Loans.com.au Managing Director Marie Mortimer said those who can afford to pay a deposit of 25% deserve to pay less. 

“Pulling together 25% of the value of a home to bring when you buy or refinance is hard work however you do it,” Ms Mortimer said.

“We think borrowers who have done what it takes to start out with 25% of the home’s value up front should get a lower interest rate.”

A 2.78% interest rate on a $450,000 loan over a 30-year loan term (P&I repayments) could have monthly repayments of $1,844 per month, or about $214,000 in interest over the life of the loan.  

Comparatively, a 2.88% interest rate could have repayments of $1,868 per month ($222,559 in interest overall), meaning it may provide a substantial discount for those who manage a 25% deposit. 

According to Ms Mortimer, a low-rate such as this is possible thanks to an innovative online lending model, which is more efficient than traditional lending. 

“We offer personal service but we do it without the huge overheads of bricks-and mortar-branches that pump up the costs and the interest rates for other home lenders,” Ms Mortimer said.

Who else has cut home loan rates? 

Loans.com.au isn't the only lender to cut interest rates lately, even though there hasn't been an RBA rate cut since October last year. 

A number of lenders have decided to slash interest rates on various home loan products in recent weeks, with some of them being fairly substantial. 

Last week, for example, saw Commonwealth Bank cut a number of fixed-rate loans by up to 50 basis points

Large customer-owned bank CUA also cut fixed-rates by up to 36 basis points, now offering a competitive rate of 2.84% p.a. for a 3-year fixed loan. 

Two of Australia's other major banks, ANZ and Westpac, also cut home loan rates by as much as 50 basis points in January, and with another RBA rate cut expected to occur in April now, interest rates could be set to fall even lower. 




Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

Latest Articles

author-avatar
William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

Collections:

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree
to the Savings Privacy Policy