cuts Smart Home Loan rate

author-avatar By on February 18,2020 cuts Smart Home Loan rate

Photo by Coni Wang on Unsplash

Online lender 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:   

Ad rate
Comp rate*
2.63% 2.65% $1,607 More details
2.78% 2.84% $1,639 More details

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%. 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 26 March 2020. View disclaimer.

Other key aspects of this home loan include: 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? 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. 


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, and are part of the Firstmac Group. To read about how 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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William Jolly joined 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.


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