What to know about the home loan that starts with a 1

Photo by Tim Whybroe on Unsplash

Bank of Us is offering Tasmanian residents fixed-rate home loans with advertised rates as low as 1.99% p.a for up to three years.

This is the first time a lender has breached the 1% barrier after many other lenders edged close with rates in the low 2% range.

The sub-2.00% advertised rate from the Bank of Us is a 'special' offer for new owner-occupier customers on loans of up to 90% of the property value, but is said to be a limited time offer. 

The special 1.99% p.a. offer represents a 60 basis point cut over Bank of Us' regular 'FlexiDiscount' rate.

The special fixed rate will be offered across 1-year, 2-year and 3-year fixed terms:

• FlexiDiscount Special Fixed 1 Year: 1.99% p.a. (2.88% p.a. comparison rate*)
• FlexiDiscount Special Fixed 2 Years: 1.99% p.a. (2.81% p.a. comparison rate*)
• FlexiDiscount Special Fixed 3 Years: 1.99% p.a. (2.73% p.a. comparison rate*)

Source: Bank of Us. Rates based on LVR >80% ≤90%

Bank of Us features the same advertised rates for borrowers with LVRs less than or equal to 80%, but the comparison rates are lower. 

The advertised rate doesn't take into account some of the fees applicable (many home loans have various fees attached, hence the higher comparison rate). 

There is a $350 loan establishment fee, however there are no ongoing monthly or yearly fees.

After the fixed period ends, the advertised interest rate reverts to a higher variable rate, which is 2.93% p.a. at the time of writing.

This revert rate is lower than what we've seen in the market, with many lenders' standard variable rates still in the 3-4% range.

More broadly, many lenders have focused on cutting interest rates for fixed loans recently as more owner-occupiers opt to lock in their home loan interest rates. 

CommBank recently revealed owner-occupiers made up nearly half of all of its fixed rate lending in May.

Bank of Us is a customer-owned bank based in Tasmania, and began as the Launceston Equitable Building and Investment Society in 1870.

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

Advertisement

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

Product Features

• Fast turnaround times, can meet 30-day settlement
• For purchase and refinance, min 20% deposit
• No ongoing or monthly fees, add offset for 0.10%

Monthly repayments:$1,601

2.60%Advertised Rate (p.a.)

2.96%Comparison Rate*

More details

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Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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