75/75: Meet the home loan lenders with perfect RBA rate cut scores

Niko Iliakis

04 Oct 2019

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The Reserve Bank has been particularly busy this year, having cut official interest rates three times since June. But have any banks or lenders passed on the full 0.25% cut on all three occasions?

Enter Athena Home Loans, Homestar and UBank. Within hours of the RBA’s decision this month, all three announced they’ll be cutting variable rate home loans in kind. That makes them the only lenders so far to reduce rates by the full 0.75% in 2019.

Back in June, there was a lot of pressure on lenders to do right by their customers and pass on the full cut - and the response was near unanimous. 47 lenders reduced their variable home loan rates by 0.25%, while the holdouts faced plenty of criticism.

But after two more cuts to the cash rate it’s become clear we’ve reached a point of diminishing returns. So far, 21 lenders in our database have made a move this month, hacking off an average of only 0.16%. As for the big banks, they’ve made cuts of between 0.13% and 0.15%.

The trio of Athena, Homestar and UBank has done a good job of bucking that trend. Currently, the three offer rates much lower than the average big bank standard variable rate - which currently sits at 4.80%. Below, we run through a selection of home loans from each plus some of the features that make them great.

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Athena Variable Home Loan
  • 2.84% p.a. variable rate (2.80% comparison rate*)

  • Free extra repayments and redraw facility

  • No application fees or ongoing fees

Since launching earlier in the year, Athena Home Loans has set out to rescue homebuyers from the scourge of high interest rates — that’s why it’s made a point to pass on the full rate cut on all three occasions this year. Its Variable Home Loan currently offers rates as low as 2.84% p.a. (2.80% p.a. comparison rate*), and when it comes to features, very little has been left off the table. You can pay down your loan quicker without being penalised, access a redraw facility, and if you make all your repayments on time, you’ll be treated to a 0.01% loyalty discount for each of the first five years.

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Homestar Star Essentials Home Loan
  • Super low 2.74% p.a. variable rate (2.77% p.a. comparison rate*)

  • Free extra repayments and redraw facility

  • Discharge fee waived if the loan goes to full term

The ever-reliable Homestar has reduced rates by 0.25% following all three RBA rate cuts this year. And while many home loans will only start to dip below 3.00% in the coming weeks, the Homestar Star Essentials has occupied that territory since July. Along with a fantastic 2.74% p.a. variable rate (2.77% p.a. comparison rate*), you’ll be able to make free extra repayments and access a redraw facility. And while there’s a $535 discharge fee, it will be waived if your loan goes to full term.

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UBank UHomeLoan - Discount Offer
  • 2.84% p.a. for loans over $200,000 (2.84% p.a. comparison rate*)

  • Free extra repayments and redraw facility

  • No annual fees

Rounding out the list is NAB subsidiary, UBank, which announced it will be cutting variable rates by 0.25% as of 29 October. That means its UHome Loan Discount Offer will come with rates as low as 2.84% p.a. (2.84% p.a. comparison rate*) if you’re borrowing more than $200,000. You’ll be able to make free extra repayments, access a redraw facility, and best of all, there are no upfront or ongoing fees you’ll have to worry about. Just remember that the Discount Offer is only available on new variable rate UHomeLoan applications, so if you already have a UHomeLoan you wont be eligible.

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for the amount and term you entered.

**Initial monthly repayment figures are estimates only, based on the advertised rate, and a loan of $500,000 repaid over 25 years. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

If you’d like to see more fantastic offers, be sure to visit our home loans comparison page. And if you’re wondering what you’re lender has decided in the wake of the RBA’s decision this month, check out our Naughty or Nice table for more information.

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