Major online lender launches sub-2.00% home loan

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on July 22, 2020
Major online lender launches sub-2.00% home loan

Photo by Mike Yukhtenko on Unsplash

One of Australia's largest non-bank lenders, loans.com.au, has launched what could be Australia's lowest variable home loan rate.

Launched today, loans.com.au's new Smart Booster Discounted Variable Home Loan has a 1.99% p.a. introductory variable rate (2.55% p.a. comparison rate*).

The 1.99% p.a. interest rate applies for one year before reverting to a rate of 2.57% p.a.

Available to homebuyers and refinancers with at least a 20% deposit or equity, the new mortgage is considered to be Australia's first variable rate home loan with an interest rate under 2%, albeit an introductory one.

It's an offer which throws down the gauntlet to other lenders in Australia amid an increasingly competitive home loan market.  

Buying a home or looking to refinance? The table below features home loans with some of the lowest 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
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

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

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

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

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

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

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

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

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of January 18, 2022. View disclaimer.

Loans.com.au Managing Director Marie Mortimer said she was excited about what the new rate could mean for Australian borrowers. 

“This is the lowest variable rate we have ever offered,” Ms Mortimer said.

“This is a great opportunity for Australians to boost their equity and own their own home sooner.

“Borrowers who are considering switching to a lower rate should take the opportunity to reassess their loan provider and potentially refinance."

The online lender also launched a two year discounted variable rate of 2.09% p.a.(2.71% p.a comparison rate*).

Both products are limited to a maximum loan amount of $1,000,000 and a maximum loan-to-value ratio (LVR) of 80%.  

Only a fortnight ago, loans.com.au made sweeping changes to its existing variable and fixed products, cutting its two-year fixed rate for owner-occupiers paying principal and interest to just 2.29% p.a. (2.98% p.a. comparison rate).

Ms Mortimer said refinancing was much easier than people realised, especially with the wealth of online lenders in Australia. 

“Many people are keen to leave the big banks and are surprised to discover how easy it is to refinance and the great deals that are out there with online lenders,” she said.

“Many of our customers tell us that they delayed refinancing because they thought it would be a big hassle but it turned out to be much simpler than they expected and well worth the time invested.”

loans.com.au may be the first lender to offer a variable rate home loan under 2%, but it's not the first time a home loan has started with a 1. 

At the end of June, Tasmanian-based Bank of Us offered Tasmanian residents fixed-rate home loans for up to three years for 1.99% p.a.

But while Bank of Us' rate will be locked in for fixed term for, loans.com.au's rate will not.

Being a variable rate there is the possibility it could increase or decrease during the introductory period.


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.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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