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The 31 lenders offering mortgage rates under 2%

Lucy Dean
·3-min read
Typical Australian suburb from above in autumn
Is it time for you to get a better home loan rate? Image: Getty

Consumer groups are urging Australians to get themselves a better home loan rate after the Reserve Bank's most recent interest rate cut to just 0.1 per cent.

While 41 lenders have announced interest rate cuts, only five of those on the RateCity database are delivering those interest rate cuts to Australians on variable rates, which means those borrowers will need to push for a change.

According to RateCity analysis, there are now some 30 lenders offering home loan rates below 2 per cent.

“It’s no longer just online lenders with low rates. The bigger banks are now starting to steal their thunder offering up fixed rates under 2 per cent,” RateCity.com.au research director Sally Tindall said.

“For the average borrower, refinancing to a low fixed rate could save them thousands of dollars a year but locking in is not for everyone.

Should I rush in to fix my rate?

While it might be tempting to lock in a record low rate, it could end up being a bad idea, Tindall said.

“Don’t rush into fixing. Make sure you’re happy with the rate but also with the terms and conditions that come with a fixed rate.”

Instead, it’s worth considering a split rate, allowing borrowers to take advantage of the low interest rates while preserving their offset account, or their ability to make additional repayments.

These lenders are offering rates below 2 per cent

Lender

Lowest rate on offer

CBA

1.99% 4-yr fixed

Westpac

1.89% 4-yr fixed

NAB

1.98% 4-yr fixed

AMP Bank

1.97% 3-yr fixed

Bank First

1.99% 3-yr fixed

Bank of Melbourne

1.89% 4-yr fixed

BankSA

1.99% 4-yr fixed

Bankwest

1.99% 4-yr fixed

BOQ

1.99% 4-yr fixed

Citi

1.99% 2-yr fixed

CUA

1.97% 3-yr fixed

Freedom Lend

1.97% variable

Greater Bank

1.99% 1-yr fixed

Homestar Finance

1.79% variable

HSBC

1.88% 2-yr fixed

Hume Bank

1.99% 3-yr fixed (construction)

Illawarra Credit Union

1.99% 2-yr fixed

IMB Bank

1.97% 3-yr fixed

ING

1.99% 4-yr fixed

loans.com.au

1.99% 3-yr fixed

Mortgage House

1.94% variable

Newcastle Permanent

1.98% 1-yr fixed

P&N Bank

1.99% 1-yr fixed

Pacific Mortgage Group

1.89% variable

People's Choice Credit Union

1.99% 4-yr fixed

RACQ Bank

1.99% 3-yr fixed

RAMS

1.99% 4-yr fixed

Reduce Home Loans

1.77% variable

St.George Bank

1.89% 4-yr fixed

Suncorp Bank

1.89% 2-yr fixed

Ubank

1.95% 3-yr fixed

ANZ is the only major bank which isn’t offering a sub-2 per cent fixed rate, RateCity noted.

Of these, only five are variable rates: Reduce Home Loans, Pacific Mortgage Group, Mortgage House, Homestar Finance and Freedom Lend.

‘Refinancing avalanche’ looms

Finder analysis found one in three borrowers plan to refinance over the coming 12 months, which would be a collective saving of $389 million, or $395 a month each on average.

That analysis came before the RBA took interest rates lower, spurring even greater interest.

“Borrowers see record low rates and don’t want to be stuck paying more for their mortgage than they need to,” Finder insights manager Graham Cooke said.

“The pandemic has made people assess where every dollar they earn goes and refinancing a mortgage can lead to a huge leap in savings.”

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