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

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on June 30, 2020
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.

Lender

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • 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%
UNLIMITED REDRAWSSPECIAL OFFER

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

  • 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%
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS
NSW/VIC/SA METRO & INNER REGIONAL AREAS

Variable Home Loan (Principal and Interest)

  • $5000 Cashback. T&Cs Apply.
Variable
More details
REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
NO ONGOING FEESFREE REDRAW FACILITY
  • Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.
NO ONGOING FEESFREE REDRAW FACILITY

Live-in Variable Loan (Principal and Interest) (LVR < 90%)

  • Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.

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%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *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. Rates correct as of June 25, 2022. View disclaimer.


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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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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