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 - CommBank, Westpac 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.

Smart Booster Home Loan
Product Features
- Discount variable for 1 year <=80% LVR
- No ongoing fees
- Unlimited redraw facility
Monthly repayments: $1,476
Advertised
Rate (p.a.)
1.99%
Comparison
Rate (p.a.)
2.47%
Product Features
- 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.
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): 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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