Which lenders introduced sub-2% home loans post-RBA cut?

author-avatar By on November 06, 2020
Which lenders introduced sub-2% home loans post-RBA cut?

Photo by Kon Karampelas on Unsplash

The Reserve Bank's announcement on Tuesday caused a flurry of cuts, not least of which were quite a few lenders cutting home loans below 2% for the first time.

Most notable of which were three of the big four banks - CommBankWestpac and NAB - but borrowers must be willing to fix their home loan for four years.

  • CommBank: 'Wealth Package' for owner occupiers fixed for four years paying principal and interest cut by 100bps to 1.99% p.a. (comparison rate TBC*). Rate effective from 11 November.
  • Westpac: 'Premier Advantage Package' for owner occupiers paying principal and interest cut by 80bps to 1.99% p.a. (3.29% comparison rate*). Rate effective from 9 November.
  • NAB: 'Choice Package' for owner occupiers fixed for four years paying principal and interest cut by 81bps to 1.98% p.a. (comparison rate TBC*). Rate effective 6 November.

Note, these are packaged home loans, meaning you can expect the comparison rate to be in the 3.00% p.a. range, but watch this space.

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.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME 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%
LIMITED TIME 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%
VariableMore details
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
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
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 18, 2021. View disclaimer.

A number of other smaller and challenger lenders also introduced or added some sub-2% home loans quickly after the Reserve Bank announced its decision.

Suncorp

Suncorp introduced its first sub-2% home loan, taking effect from 19 November.

It's a two-year fixed loan with a 1.89% p.a. advertised interest rate.

The comparison rate and the finer details are yet to be confirmed.

HSBC

HSBC also introduced a sub-2% home loan for owner occupiers willing to fix for two years.

Paying principal & interest, the home loan is packaged, and has a rate of 1.88% p.a. (2.98% p.a. comparison rate*), and is available from 19 November.

Reduce Home Loans

Reduce was one of the few lenders to make cuts to variable rates. 

  • Rate Cutter Variable 60% P&I: 12 basis point cut to 1.77% p.a. (1.83% p.a. comparison rate*)
  • Super Saver Variable 80% P&I: 20 basis point cut to 1.99% p.a. (2.05% p.a. comparison rate*)

UBank

Effective 13 November, UBank is cutting its three-year fixed range by 19 basis points down to 1.95% p.a. (2.36% p.a. comparison rate*).

It's for owner occupiers paying P&I, and there's no usual 'rate-lock' fee of $395 if borrowers settle on or before 31 March 2021.

The 2.36% p.a. comparison rate applies from 13 to 29 November, at which point it will revert to 2.25% p.a. when the variable rate changes take effect.

Homestar Finance

Homestar introduced a new 'Star Gold' home loan for owner occupiers paying P&I with a maximum of 60% LVR e.g. for those refinancing or with large deposits.

The rate is 1.79% p.a. (1.84% p.a. comparison rate*).

Pacific Mortgage Group

Pacific Mortgage Group was another lender that introduced a sub-2% home loan for borrowers with larger deposits or for those refinancing.

It cut its variable home loan paying P&I with a maximum LVR of 60% by 10 basis points down to 1.89% p.a. (1.89% p.a. comparison rate*). 

Freedom Lend

Freedom Lend cut its 'Freedom Variable' home loan for owner occupiers paying P&I with a maximum LVR of 70%.

The rate was cut by 20 basis points down to 1.97% p.a. (1.97% 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): Great Southern Bank, 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.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

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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author-avatar
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 is passionate about breaking down complex financial topics for the everyday consumer.

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