Member-owned banks lead charge in cutting home loan rates

author-avatar By on July 17, 2020
Member-owned banks lead charge in cutting home loan rates

Photo by Maxwell Dugan on Unsplash

In the past week, Reliance Bank, People's Choice and Hunter United all cut home loan interest rates, with one cutting by up to 55 basis points.

It was a fairly subdued week for home loan rate changes after some large institutions made changes last week.

St. George also introduced a special LMI offer, reducing the insurance to just $1 for those with a loan-to-value ratio (LVR) up to 85%.

This week, a few member-owned institutions cut home loan interest rates across a variety of home loans for investors and owner-occupiers, across both principal and interest (P&I) and interest-only (IO) payment terms.

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.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

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%
LIMITED TIME OFFER

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%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 16, 2021. View disclaimer.

Reliance Bank

Reliance Bank made quite a few rate changes today, mostly by 25 basis points. However, one loan was cut by 55 basis points.

That 55 point cut goes to the First Rate Investment loan paying interest only (special offer), now 3.64% p.a. (4.36% p.a. comparison rate*)

A couple of other key cuts for owner-occupiers paying P&I were:

  • FHB First Rate Special 70%: 25 basis point cut to 2.80% p.a. (2.86% p.a. comparison rate*)
  • All In One Rewards Package 750k+:  25 basis point cut to 3.40% p.a. (3.83% p.a. comparison rate*)

Keep in mind special offers can be withdrawn at any time.

People's Choice Credit Union

People's Choice made just one cut today, reducing its variable Home Loan Package for investors as a special offer by 27 basis points.

The rate is now 3.53% p.a. (3.93% p.a. comparison rate*)

Hunter United

Hunter United also made just one cut, reducing its owner-occupier loan fixed for two years by 10 basis points.

The interest rate is now 2.39% p.a. (3.81% p.a. comparison rate*)

The table below features home loans with some of the lowest fixed interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES

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 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. Rates correct as of October 16, 2021. View disclaimer.

UBank, Reduce also cut home loan rates

In the past week, both UBank and Reduce cut a fairly wide variety of home loan rates.

UBank

UBank cut by between 10 and 15 basis points after it reduced some home loan rates last week too.

Some key cuts from UBank this week were:

  • Discount Offer Owner-Occupier P&I: 10 basis point cut to 2.49% p.a. (2.49% p.a. comparison rate*)
  • Discount Offer Investor Variable P&I: 10 basis point cut to 2.89% p.a. (2.89% p.a. comparison rate*)
  • Discount Offer Investor Variable IO: 15 basis point cut to 3.29% p.a. (3.16% p.a. comparison rate*)

Keep in mind offers and discounted rates can end at any time.

Reduce Home Loans

Reduce cut a handful of loans for owner-occupiers by up to 10 basis points. Some key cuts were:

  • Low Rider Variable 70%: 4 basis point cut to 2.25% p.a. (2.28% p.a. comparison rate*)
  • Rate Lovers 80%: 10 basis point cut to 2.39% p.a. (2.42% p.a. comparison rate*)

Meanwhile, Reduce also raised rates slightly on a couple of home loans:

  • Low Rider Variable 70% IO Offset: 6 basis point rise to 2.60% p.a. (2.62% p.a. comparison rate*)
  • Investor Rate Lovers 90%: 10 basis point rise to 3.19% p.a. (3.19% p.a. comparison rate*)

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): Great Southern Bank, 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 is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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