A number of lenders have broken the 2% barrier, now offering home loans with advertised interest rates starting with a '1', but how do they stack up?
It’s finally happened. After two reductions in the Reserve Bank’s cash rate in March 2020, and yet another in November, there are now quite a few lenders that offer home loans starting with a '1'.
- Big Four Bank Home Loans Under 2% Compared
- Variable Home Loans Under 2%
- Home Loans Under 2% for Small Deposits
- Investor Home Loans Under 2%
- Interest-Only Home Loans Under 2%
- Why Does the Comparison Rate Matter?
- Full List of Lenders with Home Loans Under 2%
Who offers home loans under 2%?
According to Savings.com.au’s market research, there are now at least 40 lenders offering home loans with advertised rates below 2.00% p.a. Below are a handful of home loans starting with a 1 for owner-occupiers.
Lender | Advertised rate | Comparison rate | Monthly repayment | Rate Type | Offset | Redraw | Ongoing Fee | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Pre-approval | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Variable | More details | ||||||||||||
| FEATUREDLIMITED TIME OFFER | Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
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Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
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| Variable | More details | ||||||||||||
| FEATURED100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES | Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)
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Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)
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| Variable | More details | ||||||||||||
| FEATUREDAN EASY ONLINE APPLICATION | Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)
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Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)
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| Variable | More details | ||||||||||||
| FEATUREDYOU COULD WIN $100k TO PAY DOWN YOUR LOAN* | Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)
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Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)
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| Variable | More details | ||||||||||||
| FEATUREDREFINANCE IN MINUTES, NOT WEEKS | Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)
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Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)
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| Fixed | More details | ||||||||||||
Total Home Loan Package Home Loan Fixed Special 2 Years (LVR < 60%) | |||||||||||||
| Fixed | More details | ||||||||||||
Package Fixed Home Loan (Principal and Interest) 2 Years (LVR < 80%) | |||||||||||||
| Fixed | More details | ||||||||||||
Premium Plus Package Fixed Rate Home Loan Special (Principal and Interest) 2 Years | |||||||||||||
| Fixed | More details | ||||||||||||
Basic Home Loan Fixed 3 Year (LVR < 60%) | |||||||||||||
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 27, 2021. View disclaimer.
Note that many of these are ‘special offers’ which may be withdrawn at any time or are only available until a set date. Many lenders now also offer more than one sub-2% home loan. Also note the varying conditions between each product as well as the different comparison rates.
ANZ, CommBank, Westpac, and NAB home loans under 2%
Three of the big four banks were the first to cut home loans after November's RBA rate decision. CommBank, Westpac, and NAB were the first to cut, while ANZ came to the party later. In many cases you'll need to be willing to fix for between two and four years on a packaged home loan.
Lender | Advertised rate | Comparison rate | Monthly repayment | Rate Type | Offset | Redraw | Ongoing Fee | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Pre-approval | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed | More details | ||||||||||||
Premier Package Fixed Options Home Loan (Principal and Interest) 1 Year (LVR < 70%) | |||||||||||||
| Fixed | More details | ||||||||||||
Wealth Package Fixed Rate Home Loan (Principal and Interest) 1 Year | |||||||||||||
| Fixed | More details | ||||||||||||
Choice Package Tailored Home Loan Fixed (Principal and Interest) 2 Years | |||||||||||||
| Fixed | More details | ||||||||||||
Breakfree Package Fixed Rate Home Loan (Principal and Interest) 1 Year (LVR > 80%) | |||||||||||||
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 27, 2021. View disclaimer.
Variable home loans under 2%
You may have noticed that a lot of the hottest rate cuts are going to fixed home loans. The pandemic and subsequent recession have led to many lenders wanting to fix customers to home loans for some cashflow certainty, and for various other reasons. However, those looking at variable rates do not necessarily miss out.
Lender | Advertised rate | Comparison rate | Monthly repayment | Rate Type | Offset | Redraw | Ongoing Fee | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Pre-approval | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Variable | More details | ||||||||||||
| FEATUREDLIMITED TIME OFFER | Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
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Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
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| Variable | More details | ||||||||||||
| FEATUREDAN EASY ONLINE APPLICATION | Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)
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Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)
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| Variable | More details | ||||||||||||
| FEATUREDYOU COULD WIN $100k TO PAY DOWN YOUR LOAN* | Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)
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Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)
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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 27, 2021. View disclaimer.
Home loans under 2% for smaller deposits
Many of the home loans with the lowest advertised rates are generally for borrowers with 20% or greater deposits. If you have a smaller deposit, say 10% (i.e. 90% LVR) your options could be limited. However, there are a handful of lenders available - with some even offering home loans under 2% with as little as 5% deposit - as seen below.
Lender | Advertised rate | Comparison rate | Monthly repayment | Rate Type | Offset | Redraw | Ongoing Fee | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Pre-approval | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed | More details | ||||||||||||
| FREE REDRAW FACILITY | Fixed Rate OO P&I - 2 Years | ||||||||||||
| Fixed | More details | ||||||||||||
Orange Advantage Home Loan Fixed 2 Years (LVR 80%-90%) | |||||||||||||
| Fixed | More details | ||||||||||||
Choice Package Tailored Home Loan Fixed (Principal and Interest) 2 Years | |||||||||||||
| Fixed | More details | ||||||||||||
Wealth Package Fixed Rate Home Loan (Principal and Interest) 1 Year | |||||||||||||
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 27, 2021. View disclaimer.
Investor home loans under 2%
As it stands, there are very few lenders catering towards the investment space with advertised rates under 2% p.a. Most tend to hover around the low-2% range. Regardless, there is still a smattering of home loans under 2% for investors, as seen below. As always, check the specific loan purpose, as well as the comparison rate, and LVR requirements.
Lender | Advertised rate | Comparison rate | Monthly repayment | Rate Type | Offset | Redraw | Ongoing Fee | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Pre-approval | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Variable | More details | ||||||||||||
Smart Booster Investor Bundle (Principal and Interest) | |||||||||||||
| Variable | More details | ||||||||||||
Smart Booster Investor Bundle (Interest Only) | |||||||||||||
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 27, 2021. View disclaimer.
Interest-only home loans under 2%
Paying interest-only can be kinder on the budget when you first take out a home loan, particularly for investors. However, there are decidedly few lenders offering home loans under 2% while paying interest-only. As always, check the loan purpose and the comparison rate, which gives an indication of any fees you may have to pay.
Lender | Advertised rate | Comparison rate | Monthly repayment | Rate Type | Offset | Redraw | Ongoing Fee | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Pre-approval | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Variable | More details | ||||||||||||
| FEATUREDGET A DISCOUNTED GREEN RATE | Green Construction Home Loan (Interest Only)
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Green Construction Home Loan (Interest Only)
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| Variable | More details | ||||||||||||
Smart Booster Investor Bundle (Interest Only) | |||||||||||||
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 27, 2021. View disclaimer.
Why does the comparison rate matter?
It’s all well and good to have a home loan with an advertised rate of less than 2.00% p.a. However, arguably the more important figure to look at is the comparison rate. While the advertised rate determines your base monthly repayment, it doesn’t take into account a few other things, which is where the comparison rate steps in.
The comparison rate accounts for yearly fees, monthly fees, package fees, settlement fees, exit fees and a myriad of other fees, such as for offset accounts and so on. The comparison rate, in Australia, is also based on a $150,000 loan for a 25-year term, in many circumstances. Considering in the capital cities the median dwelling value is over $500,000, this might not mean much to you.
Comparison rates also take into account revert rates, which explains why many fixed-rate and introductory-rate loans tend to have a much higher comparison rate relative to the advertised rate.
Lenders with home loans under 2%
ANZ
CommBank
Westpac
NAB
86 400
Adelaide Bank
AMP Bank
Aussie
Bank Australia
Bank First
Bank of Melbourne
Bank of Queensland (BOQ)
BankSA
Bankwest
BankVic
BCU
Bendigo Bank
Citi
Credit Union SA
Great Southern Bank (formerly CUA)
Endeavour Mutual
Freedom Lend
G&C Mutual
Greater Bank
Homestar Finance
HSBC
Hume Bank
Illawarra Credit Union
IMB Bank
ING
LCU (Laboratories Credit Union)
loans.com.au
ME Bank
Mortgage House
MOVE Bank
Nano
Newcastle Permanent
Northern Inland Credit Union
P&N Bank
Pacific Mortgage Group
People's Choice Credit Union
QBANK
Queensland Country Bank
RACQ Bank
RAMS
Reduce Home Loans
St.George Bank
Suncorp Bank
Sydney Mutual
Teachers Mutual Bank
Tic:Toc
UBank
Virgin Money
WLTH
Yard
First published 26 August 2020, last updated 5 October 2021
Photo by Josh Spires on Unsplash
