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, and yet another in November, there’s now quite a few lenders that offer home loans starting with a '1'.
- CommBank, Westpac, NAB Home Loans Under 2%
- Variable Home Loans Under 2%
- Home Loans Under 2% for Small Deposits
- Investor 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 35 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.

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
Note that many of these are ‘special offers’ which may be withdrawn at any time or are only available until a set date.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.
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. As it stands, ANZ does not currently offer a home loan under 2%, whereas CommBank, Westpac, and NAB do. In many cases you'll need to be willing to fix for four years on a packaged home loan.
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 has led to many lenders wanting to fix customers to home loans for some cashflow certainty. However, those looking at variable rates do not necessarily miss out.
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.
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.
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%
CommBank
Westpac
NAB
AMP Bank
Aussie
Bank Australia
Bank First
Bank of Melbourne
BankSA
Bankwest
BankVic
BCU
Citi
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
Newcastle Permanent
Northern Inland Credit Union
P&N Bank
Pacific Mortgage Group
People's Choice Credit Union
QBANK
RACQ Bank
RAMS
Reduce Home Loans
St.George Bank
Suncorp Bank
Sydney Mutual
Teachers Mutual Bank
Tic:Toc
UBank
First published 26 August 2020, last updated 17 February 2021
Photo by Wil Stewart on Unsplash