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Home loan rates hit new record low of 1.99%

Home loan rates hit new record low of 1.99%

29 Jun, 2020 - 3 min read

Fixed home loan rates continue to tumble, with Bank of Us offering fixed rates of just 1.99 per cent.

Bank of Us has announced the record-breaking rate of 1.99 per cent, fixed for 1 to 3 years, for owner-occupiers paying principal and interest repayments with a deposit of 10 per cent or more. The rate is exclusive to residents of Tasmania.

Bank of Us Flexi Discount Special (as of 30 June 2020)

Loan term	Fixed rate	Comparison rate
1 year fixed	1.99%	2.78%
2 year fixed	1.99%	2.71%
3 year fixed	1.99%	2.64%

Note: Rate change effective 30 June 2020. Rate exclusive to residents of Tasmania.

Sally Tindall, research director at RateCity, said it was the start of a new era for home loans in Australia.

“From tomorrow, Tasmanians who lives in their own home can apply for a mortgage rate that starts with a one,” she said.

“This is game on for homeowners looking to fix. We expect more low-cost lenders to follow suit with rates under 2 per cent.

“At this stage, the big four banks are unlikely to chase them down, but if they start losing customers to the smaller lenders, they might be forced to cut fixed rates again.

“Even a year ago, nobody expected rates would fall this low. But these are extraordinary times and lenders are responding with extraordinary rates,” she said.

Lowest 2-year fixed rates on RateCity.com.au

Lender	Fixed rate	Comparison rate
Bank of Us (Tasmania only)	1.99%	2.71%
Homestar Finance	2.06%	2.49%
HSBC	2.09%	2.98%

See notes below.

Lowest 3-year fixed rates on RateCity.com.au

Lender	Fixed rate	Comparison rate
Bank of Us (Tasmania only)	1.99%	2.64%
BCU	2.16%	3.63%
St George	2.19%	3.33%

See notes below.

Lowest 5-year fixed rates on RateCity.com.au

Lender	Fixed rate	Comparison rate
RACQ (QLD only)	2.49%	3.76%
UBank	2.59%	2.91%
ING	2.59%	3.52%

See notes below.

Big Four Bank lowest rates

Lender	Advertised variable	Advertised 2-yr fixed	Advertised 3-yr fixed
CBA	2.79%	2.29%	2.29%
Westpac	2.69%	2.19%	2.19%
NAB	2.69%	2.19%	2.29%
ANZ	2.72%	2.29%	2.29%

*Westpac’s lowest rates are for borrowers with an LVR of 70% or less.

Note: the above rates are for owner occupiers paying principal and interest. Some loan to value restrictions may apply. Note Bank Australia has fixed rates under 2 per cent for people with new or near-new homes with a NatHERS rating of 7 stars or higher.

Disclaimer

This article is over two years old, last updated on June 29, 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.

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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.