UBank slashes fixed interest rates, while Bank of Us has a new low offer
On Friday a couple of UBank rate changes took effect, including:
- UHomeLoan Fixed P&I 3 Years: Cut by 10 basis points to 1.85% p.a. (2.24% p.a. comparison rate*)
- UHomeLoan Fixed P&I 3 Years 85%: Cut by 10 basis points to 2.05% p.a. (2.40% p.a. comparison rate*)
This follows UBank's cuts to variable investor rates in late August.
UBank's feature on its 85% loan-to-value ratio (LVR) home loan is that borrowers do not have to pay lenders mortgage insurance (LMI).
"LMI can add tens of thousands to a borrower's loan. Here at UBank, we believe it's an extra expense our customers can do without," UBank CEO Philippa Watson told Savings.com.au.
Depending on the size of the home loan, paying a slightly higher interest rate could work out to be cheaper than paying insurance, which is typically anywhere from 1-4% of the purchase price depending on insurance provider.
Buyers could also factor in capital gains and time taken to save for a deposit, given property prices have increased by more than 15% in the year to date.
Domain's 2021 First Home Buyers report shows an increase in the time taken for first home buyers to save for a 20% deposit compared to a year ago.
In Sydney for example, it now takes first home buyers six months longer to save for a 'starter home' compared to a year ago, now sitting at seven years and one month.
Bank of Us introduces new low offer for Tasmanian residents
Tasmanian-based Bank of Us has introduced a new 'Special Offer' discounted rate on its 'FlexiDiscount' home loan, fixed for one year with 80% LVR.
The rate is 1.79% p.a. (2.45% p.a. comparison rates*), and is offered to Tasmanian residents only.
This represents one of the lowest home loan rates ever, with Bank of Us having form as a market leader.
In June 2020, Bank of Us became the first in Savings.com.au's market research to offer a home loan rate under 2%.
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
