A new home loan starting with a 1, ING, Citi also cut rates

author-avatar By on October 23, 2020
A new home loan starting with a 1, ING, Citi also cut rates

Photo by kevin turcios on Unsplash

Late last week, Freedom Lend introduced a new sub-2% home loan, one year fixed for owner occupiers paying principal & interest with 80% LVR.

The 'Freedom Fixed' loan is 1.99% p.a. (2.43% p.a. comparison rate*), and makes it the 14th lender in Savings.com.au's market research to break the sub-2% barrier.

Freedom Lend also raised a number of other fixed loans, primarily in the investment space, by up to 70 basis points. 

Elsewhere, ING cut investment home loans by between 45 and 50 basis points, while Citi also made a wide variety of changes by up to 30 basis points.

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.

Some of ING's changes were:

  • Inv Mortgage Simplifier P&I 150k-499k: 50 basis point cut to 2.69% p.a. (2.72% p.a. comparison rate*)
  • Inv Orange Advantage P&I 150k-499k: 50 basis point cut to 2.74% p.a. (3.08% p.a. comparison rate*)
  • Inv Fixed P&I 2 Years: 45 basis point cut to 2.49% p.a. (4.38% p.a. comparison rate*)

Late last month, ING cut the rate of its popular Savings Maximiser account down to 1.50% p.a., after reducing it just two months earlier.

Earlier in the week, Citi cut in excess of 40 home loans by between 5 and 30 basis points. Some of the highlights were:

  • Mortgage Plus Inv Standard Fixed IO 5 Years: 30 basis point cut to 2.89% p.a. (3.51% p.a. comparison rate*)
  • Mortgage Plus P&I 5 Years 80% 350k+: 20 basis point cut to 2.39% p.a. (2.97% p.a. comparison rate*)
  • Standard Fixed P&I 3 Years 80% 350k+: 10 basis point cut to 2.09% p.a. (4.45% p.a. comparison rate*)

A busier week for rate cuts

Last week, neobank 86 400 was the only lender to cut home loan interest rates, but this week activity picked up a bit.

Tic:Toc introduced one of the lowest ever home loans for those with just a 10% deposit, down to 2.19% p.a. (2.20% p.a. comparison rate*)

Another online lender, homeloans.com.au, cut a few rates to investment home loans, with the lowest 'Low Rate' home loan paying P&I with maximum 60% LVR now down 20 basis points to 2.29% p.a. (2.31% p.a. comparison rate*).

Macquarie Credit Union - not to be confused with Macquarie Bank - cut a few fixed loans, with the highlight being the 3 Year Fixed Home Loan for owner occupiers paying P&I, down 18 basis points to 2.79% p.a. (4.06% p.a. comparison rate*)

Another credit union, People's Choice, also cut a few home loans, with the highlight its Basic Variable loan for investors paying P&I with a maximum LVR of 80%, down by 40 basis points to 2.69% p.a. (2.69% 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 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.

*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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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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