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 variable interest rates on the market for owner occupiers.
Smart Booster Home Loan
- Discount variable for 1 year <=80% LVR
- No ongoing fees
- Unlimited redraw facility
Monthly repayments: $1,476
- Discount variable for 1 year
- No ongoing fees
- Unlimited redraw facility
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.
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 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*)
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*)
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*)
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 2019. 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.
*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.
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