The biggest cut belongs to Horizon Bank, which cut its five-year fixed loan, for both owner-occupiers and investors by 30 basis points. The key details are:

  • Owner Occupier Fixed 5 Years: Down to 2.99% p.a. (3.33% p.a. comparison rate*)
  • Investor Fixed 5 Years: Down to 3.24% p.a. (3.58% p.a. comparison rate*)

Meanwhile, Suncorp's biggest cuts were for its fixed loans for investors. Some key highlights were:

  • Home Package Plus Investment Fixed 90% 2 Years: 20 basis point cut to 2.79% p.a. (3.65% p.a. comparison rate*)
  • Home Package Plus Investment Fixed 80% 2 Years: 20 basis point cut to 2.59% p.a. (3.45% p.a. comparison rate*)

Note both of these lenders' cuts are for borrowers paying principal and interest (P&I), and Suncorp's cuts are for its packaged loans.

As seen above, borrowers could get a lower rate with a bigger deposit.

This 'rate tiering' is a growing trend, and other lenders such as Athena and 86 400 have introduced automatic cuts for borrowers who pay down their mortgage.

Meanwhile, on Monday, HSBC also cut a variety of home loans as a 'promotional offer' by up to 16 basis points.

The home loan to get the biggest cut was the Premier Home Smart Variable P&I 80-90%, with a 16 basis point cut to 2.79% p.a. (3.25% p.a. comparison rate*)

This is a packaged home loan and has a promotional rate for borrowers who apply by 30 November 2020.

Reduce's 'lowest ever' home loan

Earlier in the week, Reduce Home Loans introduced its first sub-2% home loan, The Reduce 'Rate Crusher' 1 Year Fixed P&I <80% at 1.90% p.a. (2.39% p.a. comparison rate*)

Initially, this was offered as an introductory variable rate for one year, but Reduce then changed it to a one-year fixed loan.

On the surface, there are effectively no differences, however, variable rates can change at any time, while fixed rates can be subject to break fees if a borrower decides to refinance.

There could also be other fees for paying down the loan early.

In Savings.com.au's market research, this new rate is the lowest on the market, and makes Reduce the ninth lender to introduce a home loan starting with a 1. 

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