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.
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) 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.
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.
*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.
- RBA says no to Christmas cash rate cut
- JobSeeker recipients spending up to 69% of their income on rent
- Borrowers with smaller deposits more likely to extend their home loan deferral
- Will the RBA change the cash rate in December?
- A brief guide to buying government bonds