UBank slashes fixed interest rates, while Bank of Us has a new low offer

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on September 03, 2021
UBank slashes fixed interest rates, while Bank of Us has a new low offer

NAB-owned digital lender UBank has cut interest rates on two fixed-rate home loans only two weeks after slashing rates on some variable-rate home loans.

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

VariableMore details
  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws

Variable Home Loan (LVR < 70%)

  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws
VariableMore 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.
VariableMore details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
VariableMore details
NO ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO ONGOING FEES

Yard PAYG Home Loan (Principal and Interest) LVR ≤ 80%

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster

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 August 20, 2022. View disclaimer.


Photo by Josh Spires on Unsplash



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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author-avatar
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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