Yahoo Finance The 31 lenders offering mortgage rates under 2%
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.
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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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