Battle of the banks – Australia’s lowest variable rate hits 2.17%

Variable home loan rates continue to drop with Freedom Lend today, the new leader in the mortgage rate wars.

The online lender is now offering a new record-low variable rate of 2.17 per cent, for new customers with a deposit of 30 per cent of more.

Home loan rates have continued to drop despite no official change to the cash rate.

Analysis of the RateCity.com.au data base shows this month alone, 15 lenders have cut more than 50 variable home loan rates for new customers.

Australia's 5th largest lender, ING, has today also cut rates on both their Mortgage Simplifier and Orange Advantage accounts by 0.19%

ING Mortgage Simplifier

Notes: Based on owner occupier paying principal and interest with an LVR of 80% or less.

RateCity.com.au research director Sally Tindall said: “The fight is on between the non-bank lenders to have the lowest variable rate in Australia.”

“Today, Freedom Lend has upped the ante in a home loan rate war that refuses to cool down,” she said.

“Over the last couple of months, smaller providers have had to chip away at their rates in order stay ahead of the big banks.

“Just three months ago, the lowest variable rate was 2.44 per cent. Since then it has dropped 27 basis points.

“With the number of new home loans on the decline, lenders desperately need new business so they’re looking to refinancers to make up the difference.

“The recent increase in refinancing activity suggests rock bottom rates are prompting people to switch to take advantage of the relentless market competition,” she said.

Lowest variable rates on RateCity.com.au

Big four bank lowest variable rates

Notes: above rates are for owner occupiers paying principal and interest. LVR restrictions apply. Westpac, Freedom Lend and Pacific Mortgage Group require a loan-to-value ratio (LVR) of 70%, Homestar Finance requires a 60% LVR. All other loans listed require an LVR of 80% or more.

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