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Variable home loan rates tumble to record low of 2.19%

Variable home loan rates tumble to record low of 2.19%

17 Jun, 2020 - 3 min read

The home loan rate war continues to heat up as the lowest variable rate in Australia drops to 2.19 per cent.

The special from Reduce Home Loans is for owner-occupier variable customers with loans up to $850,000.

Analysis from RateCity shows that at the end of March just 19 lenders offered at least one fixed or variable rate of 2.5 per cent or below. Almost three months later, with no additional cuts to the cash rate, this list has grown to 77 lenders.

Lowest variable rates on RateCity.com.au

Lender	Advertised rate	Monthly repayments on $400K
Reduce Home Loans, Super Saver Special	2.19%	$1,733
Homestar Finance, Star Gold	2.29%	$1,752
Freedom Lend, Freedom Variable Special	2.29%	$1,752

See notes below.

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

Lender	Advertised rate	Monthly repayments on $400K (first 2 yrs)
ING, Orange Advantage Fixed	2.09%	$1,713
HSBC, Fixed Rate loan	2.09%	$1,713
BCU, Fixed Rate loan	2.12%	$1,719

Note: Above rates are for owner occupiers paying principal and interest. Repayment calcs are based on the advertised rates on a $400K loan over 25 years. Fixed rates will revert to a variable rate which could be higher if the person does not re-fix. Homestar Finance and Freedom Lend loans require an LVR of 60% or less.

RateCity.com.au research director Sally Tindall said lenders were willing to drop rates further to bring new customers in.

“Since the emergency RBA rate cut in March, we’ve seen the number of lenders offering rates of 2.5 per cent or less quadruple,” she said.

“The catch is these rates are largely reserved for new customers or home-owners willing to fix their rate.

“Australians are increasingly starting to realise they have to act on their mortgage if they want to get a save money.

“The latest ABS statistics show while the number of new home loans has started to fall, refinancing is on the rise, putting pressure on the banks to remain competitive.

“We expect this rate war to intensify, despite the fact mortgage rates are already at record lows,” she said.

Reduce Home Loans Super Saver Special:

Variable rate of 2.19% for owner-occupiers paying principal and interest.
Must apply by 31 July 2020.
LVR of 80% or less, max loan size $850,000.
Upfront fees total $1170 plus government charges and funders fee.
10 basis point loyalty discount after 5 years.

Disclaimer

This article is over two years old, last updated on June 17, 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.

Liz Seatter

Senior Finance Writer

Previously a Senior Finance Writer with RateCity, Liz Seatter is an experienced journalist and producer with expertise across the wide media landscape. Her background has seen her covering finance, property, economics, current affairs, and world news since 2004, starting at Newstalk ZB radio in New Zealand, before migrating to Australia. For over a decade Liz has worked for some of Australia's biggest mastheads, including Sky News, Nine News, and heading up Nine’s weekend breakfast show, Today, before landing at RateCity.