Suncorp slashes home loans by up to 100 basis points

author-avatar By on March 05, 2021
Suncorp slashes home loans by up to 100 basis points

This morning, some of Suncorp's rate changes came into effect, including a couple of home loans cut by a full percentage point.

The home loans in question were the 'Home Package Plus' products for owner occupiers paying interest-only, fixed for two and three years with a maximum loan-to-value ratio (LVR) of 90%: 

  • Two Years: Down to 2.74% p.a. (3.94% p.a. comparison rate*)
  • Three Years: Down to 2.74% p.a. (3.85% p.a. comparison rate*)

The equivalent non-packaged loans were also cut by a full percentage point, but the advertised rate is 15 basis points higher, as seen below:

  • Non-Package Two Years: Down to 2.89% p.a. (4.76% p.a. comparison rate*)
  • Non-Package Three Years: Down to 2.89% p.a. (4.60% p.a. comparison rate*)

As always, check the comparison rate, and check the fees associated with both packaged, and standard home loans.

Other noteworthy Suncorp home loans to get slashed include the 'Home Package Plus' line, again for owner occupiers, but this time paying principal & interest and fixed for one year.

These home loans were cut by 25 basis points, and the comparison rate differs based on the size of the deposit:

  • <80% LVR: Down to 2.04% p.a. (2.92% p.a. comparison rate*)
  • <90% LVR: Down to 2.04% p.a. (3.04% p.a. comparison rate*)

Note, these two home loans are listed as 'special offers', meaning they could end at any time.

What about investors?

Suncorp also changed an incredibly wide variety of rates for investors - again, mostly in the fixed space. Some more noteworthy ones included:

  • Inv Home Package Plus Fixed P&I 80% 2 Years: 21 basis point cut to 2.28% p.a. (3.20% p.a. comparison rate*)
  • Inv Fixed P&I 2 Years 90%: 21 basis point cut to 2.73% p.a. (5.10% p.a. comparison rate*)

Some interest-only home loans also got a haircut, which are favoured by some investors. Noteworthy ones include:

  • Inv Home Package Plus Fixed IO 80% 2 Years: 10 basis point cut to 2.49% p.a. (3.22% p.a. comparison rate*)
  • Inv Fixed IO 2 Years 90%: 10 basis point cut to 2.94% p.a. (5.14% p.a. comparison rate*)

Archistar chief economist Dr Andrew Wilson said the investor market is creeping back but remains at 'record low' levels.

"Investors have clearly now joined the stampede of buyers rushing housing markets, but the overall home loan market share of investors remains at record low levels, offsetting any concerns by the RBA and financial regulators of potential market disruption," he said.

“Although investor lending is on the rise, the overall residential loan market share remains at record low levels with current strong prices growth clearly driven by unprecedented owner-occupier lending activity."



Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

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%. 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.

Question mark over 'record low' fixed home loan rates

Fixed home loans grew their marketshare in 2020, with the likes of CommBank indicating that its fixed loan book grew 38% in the second half of 2020 compared to the first half.

One big reason for this is the Reserve Bank's 'term funding facility' (TFF), which is providing up to $200 billion in low-cost funding for banks, repaid over three years.

With the Reserve Bank due to 'reshape' the TFF in June, this could spell the end for 'record low' fixed rates by July according to Firstmac CFO James Austin.

“If you look at where the banks are offering mortgage rates, their variable rates are not down, they’re still very expensive," he told Mortgage Professionals Australia.

“Those fixed rates will disappear but customers who have been put into these sub-2% rates, at the end of three years they are going to be repricing fairly heavily to the bank’s standard variable - so just question whether that’s in the best interest of the customer.”


Full disclosure: Firstmac is a non-bank lender, and is parent company of this website.

Photo: Harrison Astbury

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.
  • 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.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
Harrison joined Savings in 2020. He is an experienced journalist, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.

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