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Variable rates hit new record low ahead of RBA meeting
While the cash rate is set to remain at 0.25 per cent at this Tuesday’s RBA meeting, home loan rates continue to fall, with a new record low variable rate of 2.29 per cent.
Low cost lender Homestar Finance has dropped the rate on its Star Gold Home Loan to just 2.29 per cent, the lowest advertised variable rate on the market, although the rate is reserved for refinancers in metro areas who have paid down at least 40 per cent of their loan.
What lenders have done since 1 April:
- More than 50 lenders cut at least one variable rate for new customers.
- New lowest variable rate is 2.29%.
- Almost 60 lenders cut at least one fixed rate.
- Lowest fixed rate is 2.09%.
RateCity.com.au research director Sally Tindall said the rate drops showed there was still plenty of fire in the market despite the challenges thrown up by COVID-19.
“The cash rate might have settled in at 0.25 per cent but competition between the lenders has continued to put downward pressure on home loan rates,” she said.
“We’ve already seen fixed rates hit record lows of just 2.09 per cent, while the lowest variable rate is now 2.29 per cent.
“This will put pressure on other lenders to shave their lowest variable rates. This kind of competition is great for homeowners in a position to refinance, because lenders are willing to do battle for their business,” she said.
APRA’s monthly banking statistics for March 2020 released this week showed that challenger banks such as Macquarie Bank and HSBC were continuing to grow their loan books.
“Year-on-year Macquarie Bank has increased its home loan book by an impressive 31 per cent according to APRA’s March 2020 data. That’s a significant feat in what has been a challenging home lending market,” she said.
Lowest variable rates on RateCity.com.au
| Lender | Product | Advertised rate |
| Homestar Finance | Star Gold Home Loan | 2.29% |
| Reduce Home Loans | Rate Slasher Home Loan | 2.39% |
| Well Home Loans | Well Balanced Loan | 2.47% |
Note: Above rates are for owner-occupiers paying principal and interest. Homestar Finance Star Gold loan is only available for loans of up to $500K in metro areas, with an LVR or 60%.
Lowest 2-year fixed rates on RateCity.com.au
| Lender | Advertised rate |
| ING | 2.09% |
| Reduce Home Loans | 2.09% |
| Well Home Loans | 2.09% |
Lowest 3-year fixed rates on RateCity.com.au
| Lender | Advertised rate |
| Reduce Home Loans | 2.09% |
| Well Home Loans | 2.09% |
| ING | 2.14% |
Lowest 5-year fixed rates on RateCity.com.au
| Lender | Advertised rate |
| RACQ Bank | 2.49% |
| ING | 2.54% |
| UBank | 2.59% |
Note: above rates are for owner occupiers paying principal and interest.
APRA Monthly Banking Statistics, March 2020
| Housing loans to households ($M) | Year-on-year change in home loans % | Current share of home loan market (ADI's) % | |
| Commonwealth Bank of Australia | $449,099 | 4.67% | 25.65% |
| Westpac Group | $408,070 | -0.03% | 23.31% |
| NAB | $261,666 | -0.15% | 14.94% |
| ANZ | $245,732 | -1.60% | 14.03% |
| ING Bank Australia | $51,365 | 4.70% | 2.93% |
| Macquarie Bank | $47,417 | 31.17% | 2.71% |
| Bendigo and Adelaide Bank | $43,972 | 8.37% | 2.51% |
| Suncorp-Metway | $43,252 | 0.35% | 2.47% |
| Bank of Queensland | $28,692 | 2.32% | 1.64% |
| HSBC Bank Australia | $21,288 | 22.45% | 1.22% |
Released 30 April 2020. Share of market includes all authorised deposit taking institutions (ADI’s) but excludes non-bank lenders. Housing loans includes owner occupier and investor loans combined.
Disclaimer
This article is over two years old, last updated on May 4, 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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