Which lenders offer home loan interest rates that start with a '1'?

author-avatar By on July 07, 2021
Which lenders offer home loan interest rates that start with a '1'?

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'.

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. 

Note that many of these are ‘special offers’ which may be withdrawn at any time or are only available until a set date.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.

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.

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.

Interest only home loans under 2%

A lot of the most competitive home loan deals are for borrowers paying principal & interest, however there are now home loans under 2% paying interest-only. Interest-only home loans have traditionally been more popular in the investor space, so make sure to double check the loan purpose, as well as the comparison rate for any extra fees you may have to pay.

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%





86 400

Adelaide Bank

AMP Bank


Bank Australia

Bank First

Bank of Melbourne

Bank of Queensland (BOQ)






Credit Union SA

Great Southern Bank (formerly CUA)

Endeavour Mutual

Freedom Lend

G&C Mutual

Greater Bank

Homestar Finance


Hume Bank

Illawarra Credit Union

IMB Bank


LCU (Laboratories Credit Union)


ME Bank

Mortgage House



Newcastle Permanent

Northern Inland Credit Union

P&N Bank

Pacific Mortgage Group

People's Choice Credit Union




Reduce Home Loans

St.George Bank

Suncorp Bank

Sydney Mutual

Teachers Mutual Bank



Virgin Money



First published 26 August 2020, last updated 7 July 2021

Photo by Wil Stewart on Unsplash


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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Harrison is a Senior Finance Journalist, and joined Savings in 2020. Prior to joining Savings, 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 informing readers on the strings being pulled in high-up places and how it affects everyday Australians.

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