It was another busy week for rate cuts, with lenders on the chopping block including ING, Bendigo Bank, Bank of Queensland, and Aussie.
Headline rates for these four lenders include four-year fixed loans for owner-occupiers, up to 80% LVR paying principal & interest (P&I).
- Aussie: 'Select Basic' cut by 125 basis points down to 1.99% p.a. (2.39% p.a. comparison rate*)
- ING: 'Orange Advantage' cut by 60 basis points down to 1.99% p.a. (3.43% p.a. comparison rate*)
- BOQ: discounted rate cut by 55 basis points down to 1.99% p.a. (2.90% p.a. comparison rate*)
- Bendigo Bank: 'Complete Home Loan' cut by 110 basis points down to 2.09% p.a. (2.82% p.a. comparison rate*)
The trend of cutting big for four-year fixed loans was started by big four banks CommBank, Westpac, and NAB after the Reserve Bank's cash rate cut last Tuesday.
As it stands, ANZ is yet to introduce a sub-2% home loan.
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.
Two other banks cut home loans at the same time as giving their savings accounts a haircut as well.
UBank cut its savings account rate by 15 basis points to 1.31% p.a, while Macquarie's four-month intro savings rate was also cut by 15 basis points down to 1.35% p.a.
Conversely, quite a few of their owner-occupier home loans were also cut, including:
- UBank: UHomeLoan three-year fixed P&I cut by 19 basis points to 1.95% p.a. (2.36% p.a. comparison rate*)
- Macquarie: Basic one-year fixed P&I 70% LVR cut by 10 basis points to 2.09% p.a. (2.50% p.a. comparison rate*)
Meanwhile, a few other prominent players in the market broke the sub-2% barrier, including:
- AMP: Professional Package Fixed 3 Years 90% 52 basis point cut to 1.97% p.a. (3.01% p.a. comparison rate*)
- CUA: Fixed P&I 3 Years 80% 52 basis point cut to 1.97% p.a. (3.86% p.a. comparison rate*)
- Citi: Fixed P&I 1 Year 80% 350k+ 20 basis point cut down to 1.99% p.a. (4.94% p.a. comparison rate*)
A number of lenders also cut to under 2% on home loans with different fixed-rate periods - check each lenders' website for further details.
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.
*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may inﬂuence the cost of the loan.
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