Which lenders have cut fixed home loan rates?

author-avatar By on March 06, 2020
Which lenders have cut fixed home loan rates?

 

Photo by Adeolu Eletu on Unsplash

Lenders such as ING, loans.com.au and a few others slashed fixed home loan rates in the wake of the Reserve Bank’s rate cut on Tuesday.

After the RBA cut the cash rate to 0.50% on Tuesday, many lenders quickly followed in passing on the rate cut in full – mainly to variable home loans.

But what about fixed home loans?

Fixed rates got a lot of love too, with some lenders passing on more than a 25 basis point cut. We’ve highlighted a few key lenders below.

Looking to fix? This table below represents some home loans with low fixed home loans rates.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
 
2.19% 3.88% $1,517 More details

Base criteria of: a $400,000 loan amount, 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. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 01 July 2020. View disclaimer.

ING fixed home loan rate cuts

ING cut by as much as 40 basis points for its interest-only (IO) investor home loan, fixed for three years for a rate of 2.89% p.a. (4.91% comparison rate*).

Some other key cuts were to the following loans:

  • Orange Advantage Residential Fixed 3 Years: 35 basis point cut to 2.49% p.a. (3.89% p.a. comparison rate*)
  • Residential Fixed 3 Years: 35 basis point cut to 2.59% p.a. (3.92% p.a. comparison rate*)

ING’s advertised rates for these products represent some of the lowest home loan rates available, regardless of fixed or variable loan types. 

Loans.com.au fixed home loan rate cuts

Loans.com.au cut a few of its fixed rate products for both owner occupiers and investors by as much as 56 basis points.

That 56 point cut was for its one-year fixed owner occupier loan, down to 2.88% p.a. (3.31% p.a. comparison rate*).

Others include:

  • Owner Occupier 2 Years Fixed: 11 basis point cut to 2.88% p.a. (3.28% p.a. comparison rate*)
  • Owner Occupier 3 Years Fixed: 11 basis point cut to 2.88% p.a. (3.25% p.a. comparison rate*)

These rates represent those paying principal and interest (P&I) – rates tend to be higher if paying interest only.

BankVic fixed home loan rate cuts

BankVic made quite a few cuts to its fixed home loans. Some key cuts were:

  • Premium Home Fixed 2 Years <250k: 25 basis point cut 2.50% p.a. (3.84% p.a. comparison rate*)
  • Premium Home Fixed 3 Years <250k: 25 basis point cut to 2.50% p.a. (3.75% p.a. comparison rate*)

These rates are for BankVic’s packaged home loans, and its advertised rates are also some of the lowest in the market across the 2-year and 3-year fixed range.

Packaged home loans tend to have higher comparison rates due to larger fees however. 

Homestar Finance fixed home loan rate cuts

Homestar Finance quite possibly made the broadest changes across its products, most notably its fixed home loans for both owner occupiers and investors.

Homestar's loans enjoyed the full 25 basis point haircut. Some key fixed loans to be changed were:

  • Owner Occupied P&I Fixed 1 Year 80% LVR: down to 2.94% p.a. (2.61% p.a. comparison rate*)
  • Owner Occupied P&I Fixed 3 Years 80% LVR: down to 2.94% p.a. (2.67% p.a. comparison rate*)

Is fixing my home loan a good idea?

With all these rate cuts making fixed home loans look like an attractive proposition to some, there are still a few things to consider before fixing. 

Perhaps one of the biggest advantages to fixing a home loan is cash flow certainty: You know what you’ll be paying for a set period, which could be useful for first home buyers who don’t really know what to expect. 

However, fixing can be a bit of a gamble at the same time. If the RBA cuts the cash rate again, lenders may well follow by slashing further, leaving you locked into a now uncompetitive rate.

There are usually also break fees if you get out of your fixed home loan early. Another consideration is that once the fixed term is up, your lender could give you quite an uncompetitive revert rate, in which case it could be worthwhile looking at refinancing.

Whichever way you look at your home loan – variable or fixed – the RBA’s latest movement has resulted in quite a few lenders dropping their rates, some below 3.00% p.a.


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 2019. 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 2019) 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 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 a journalist with more than four years of experience, 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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