Home
Home Loans
News
Home loan rates continue to tumble for new customers

Home loan rates continue to tumble for new customers

07 Apr, 2020 - 3 min read

While the RBA left the cash rate at 0.25 per cent today, lenders are still slashing home loan rates for new customers, particularly owner occupiers who have equity in their home.

Today Australia’s largest lender, CBA, dropped its lowest variable rate down to 2.79 per cent, but only for new customers with at least 20 per cent equity in their property (see below for details).

Sally Tindall, research director at RateCity.com.au, said: “The best way to get a rate discount is to turn yourself into a new customer.”

“The banks are offering up some of the lowest rates we’ve ever seen. Switching lenders could potentially free up hundreds of dollars per month for people in a position to refinance,” she said.

“Australians who are struggling financially shouldn’t be afraid to ask for a rate cut either. Banks have made it clear they want to help people affected by COVID-19 where they can.

“If you do sign up to a fixed loan, do your research first and make sure you’re happy with your rate. Fixed loans are typically less flexible, but a lot of people are looking for certainty right now above everything else,” she said.

New figures from RateCity.com.au show the average mortgage holder with a $400,000 home loan could potentially save $289 per month by moving to the lowest fixed rate at 2.09 per cent. This assumes variable rates remain the same for existing customers.

Potential impact of moving from average variable owner occupier rate 3.50% to lowest fixed rate of 2.09%

Loan size	New Monthly Repayment	Monthly Savings	Savings in first year
$400,000	$2,002	-$289	-$3,474
$500,000	$2,503	-$362	-$4,342
$750,000	$3,755	-$543	-$6,514

Note: the above scenarios are for owner occupiers paying principal and interest, changing loans 5 years into a 30-year loan. Note the fixed rate terms are for 1 to 3 years, after which time it will switch to a variable rate if the person doesn't renegotiate their loan. Calculations exclude fees and assumes existing customer variable rates remain the same.

CBA’s Extra home loan rate changes, effective today (7^th April)

Loan to value ratio	Old rate	New rate	Difference
<70%	2.97%	2.79%	-0.18%
70%-80%	3.07%	2.79%	-0.28%
80%-95%	3.07%	3.13%	0.06%

Note: the above rates are for owner occupiers paying principal and interest on a variable rate.

Lowest big four bank variable rates

Bank	Advertised rate	LVR requirement
CBA	2.79%	<80%
Westpac	2.93%	<70%
NAB	2.84%	<80%
ANZ	2.72%	<80%

Note: rates are for owner occupiers paying principal and interest. Some LVR requirements apply.

Disclaimer

This article is over two years old, last updated on April 7, 2020. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.

Compare home loans in Australia

Product database updated 16 Nov, 2024

This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

Laine Gordon

Money Editor

Laine Gordon is the Money Editor at RateCity and an experienced journalist and research specialist. With a background in news and feature writing, covering finance, media and even food (a passion of hers) at Reed Elsevier publications, Laine brings almost two decades of experience to the team. Having covered major areas of interest to the general public from hip pocket issues to rising and falling interest rates and the impact to mortgages, credit and saving in Australia, she is passionate about researching and telling people’s stories to help others make better decisions about their own finances.