Rate War: Another lender introduces a home loan under 2%

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on July 31, 2020
Rate War: Another lender introduces a home loan under 2%

Photo by Greg Rakozy on Unsplash

Last night, HomeStar Finance introduced an owner-occupier home loan fixed for one year at 1.98% p.a. (2.51% p.a. comparison rate*)

Called the 'Star Classic' home loan, the online lender joins two others in recent weeks to breach the 2% barrier, though HomeStar can lay claim to the lowest advertised rate by one basis point.

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

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • 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%
UNLIMITED REDRAWSSPECIAL 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%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • 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
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

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 be 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. *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. Rates correct as of May 25, 2022. View disclaimer.

After the one year fixed term ends, the rate reverts to an ongoing variable rate of 2.49% p.a.

The rate is also a 'special offer', and borrowers will have to have their application submitted by 30 September, and approved by 31 December.

Borrowers must be owner occupiers and have a minimum 20% deposit, and there is also an application fee of $495.

Maximum loan size is $850,000 and borrowers are restricted to metro locations.

HSBC, Hume Bank, RACQ bank also cut

In what was a fairly subdued week for rate cuts, a few key lenders did manage to cut for new borrowers.

HSBC

HSBC made a wide variety of cuts to its fixed investment home loans, by up to 41 basis points. Some key cuts were:

  • Investment Fixed P&I 2 Years 80%: 36 basis point cut to 2.39% p.a. (3.29% p.a. comparison rate*)
  • Investment Fixed P&I 5 Years 80%: 41 basis point cut to 2.79% p.a. (3.21% p.a. comparison rate*)

Hume Bank

In the past week, Hume Bank also focused on cuts to fixed home loans, however these were primarily to owner-occupier home loans. A couple of key cuts were:

  • 2 Year Fixed Intro 70%: 10 basis point cut to 2.19% p.a. (4.04% p.a. comparison rate*)
  • Residential Fixed P&I 3 Years: 10 basis point cut to 2.39% p.a. (3.92% p.a. comparison rate*)

RACQ Bank

This morning RACQ Bank cut some home loan rates as 'special offers'. A couple were:

  • Mortgage Saver: 12 basis point cut to 2.75% p.a. (2.77% p.a. comparison rate*)
  • Mortgage Breaker: 12 basis point cut to 2.95% p.a. (3.01% p.a. comparison rate*)

These are variable rates for new lending only. The main difference between the two is that the 'Breaker' has a 100% offset account and a $600 establishment fee.

Meanwhile, RACQ Bank also raised a couple of home loans' interest rates by 15 basis points, including:

  • Investment Fixed 5 Years: Up to 2.94% p.a. (4.10% p.a. comparison rate*)
  • Residential Fixed 5 Years: Up to 2.74% p.a. (3.75% 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. 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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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 strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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