The only way is down for mortgage rates, as home loan interest rates starting with a two become the new norm.
Interest rates have never been so low and the question on many borrower’s lips is “should I fix my rate”?
Some of Australia’s biggest banks plus a few smaller lenders are now offering some of the lowest mortgage rates in history off the back of the most recent 0.25% cash rate cut from the Reserve Bank of Australia (RBA) in July.
But with more cash rate cuts likely to come, home loan interest rates should only continue to fall further.
At the time of writing, Greater Bank currently offers one of the lowest fixed home loan interest rates at 2.79%. RACQ Bank isn’t far behind though, recently cutting rates to 2.80% on its fixed owner-occupier home loans.
Looking for a low variable rate home loan? The table below displays owner-occupier products which may represent the best of the big four banks, best of the top 10 customer-owned banks and the best of the larger non-banks.
Smart Booster Home Loan
- Discount variable for 1 year <=80% LVR
- No ongoing fees
- Unlimited redraw facility
Monthly repayments: $1,476
- 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) owner-occupied 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. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
RACQ Bank mortgage rate cuts
Queensland’s RACQ Bank this week cut fixed home loan rates by up to 39 basis points across its fixed owner-occupier home loans.
- Choices Package two-year fixed home loans up to $20k have been reduced by 39 basis points to 2.90% p.a (comparison rate 4.40% p.a.)
- Choices Package three-year fixed home loans up to $20k have been reduced by 19 basis points to 2.80% p.a (comparison rate 4.27% p.a.)
- Three-year fixed has been reduced by 19 basis points to 2.90% p.a. (comparison rate 4.23% p.a.)
People’s Choice Credit Union mortgage rate cuts
People’s Choice Credit Union cut rates on their fixed products for owner-occupiers this week by up to 95 basis points.
- One-year fixed for owner-occupiers paying principal and interest (P&I) for loans over $100k have been reduced by 95 basis points to 2.99% p.a. (comparison rate 4.34% p.a.)
- Two-year fixed for owner-occupiers paying principal and interest (P&I) for loans over $100k have been reduced by 19 basis points to 2.99% p.a. (comparison rate 4.25% p.a.)
Teachers Mutual Bank mortgage rate cuts
Customers of Teachers Mutual Bank can now enjoy fixed home loan rates of 2.98% p.a. (comparison rates differ, see below) with the bank this week slashing rates by 50 basis points.
The changes apply to owner-occupiers paying principal and interest, effective from 29 August 2019.
- One-year fixed rates have been cut by 50 basis points to 2.98% p.a. (comparison rate 4.62% p.a.)
- Two-year fixed rates have been cut by 50 basis points to 2.98% p.a. (comparison rate 4.47% p.a.)
Greater Bank mortgage rate cuts
Greater Bank has been busy cutting rates across a number of their fixed rate products by 20 basis points to 2.99% p.a. (comparison rates differ).
The changes are effective from 30 August 2019.
- Great Rate Discount four-year fixed for a loan size of over $150k has been reduced to 2.99% p.a. (comparison rate 3.71% p.a.)
- Great Rate Discount five-year fixed for a loan size of over $150k has been reduced to 2.99% p.a. (comparison rate 3.64% p.a.)
- Great Rate four-year fixed has been reduced to 2.99% p.a. (comparison rate 3.71% p.a.)
- Great Rate four-year fixed has been reduced to 2.99% p.a. (comparison rate 3.64% p.a.)
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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