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.

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Keep in mind special offers can be withdrawn at any time.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

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*)

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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.

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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