New year, new home loan rate cuts

author-avatar By on January 08, 2021
New year, new home loan rate cuts

Maybe your New Year's resolution could be to review your home loan, as HomeStar Finance and QBank made some rate changes to ring-in 2021.

Let's face it - 2020 sucked for a lot of people (and 2021 is looking not much better) but those looking for a more affordable home loan were treated to a bevy of rate changes.

Two lenders have made some rate changes already, including HomeStar Finance, which cut on New Year's Day when most people were dozing off:

  • Star Fixed 2 Years P&I 80%: 56 basis point cut to 1.88% p.a. (2.26% p.a. comparison rate*)

HomeStar also cut the equivalent 70% LVR loan by 46 basis points. Borrowers must apply for this 'special' rate by 31 January and have the loan settled by 30 April.

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.

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%. 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.

Conversely, HomeStar also had a few home loan rate rises, presumably as special offers came to an end, including some investment home loans raised by up to 46 basis points.

Some owner occupier loans were also hiked by up to 54 basis points.

QBank was another institution to make some cuts to home loans under 2%.

  • Fixed 2 Years: 2 basis point cut to 1.97% p.a. (3.54% p.a. comparison rate*)
  • Fixed 4 Years: 2 basis point cut to 1.97% p.a. (3.26% p.a. comparison rate*)

These home loans are for owner occupiers paying principal and interest (P&I) with a maximum loan-to-value (LVR) of 90%, and are 'special offers', meaning they could change at any time.

QBank also tinkered with its home loans, raising others by up to 15 basis points, as new 'special offers' took effect and as old offers expired.

There are now at least 35 lenders with a home loan below the 2% advertised rate mark.


Photo by Immo Wegmann 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.

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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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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