Bank of Us and Homestar take fixed mortgage rates to new lows
Online lender Homestar and Tasmanian-based Bank of Us have proven that there is no floor when it comes to fixed rate loans, with both lenders dropping seriously competitive offers in the last few days.
Announced yesterday, Bank of Us has launched a limited time special rate of just 1.99% on select FlexiDiscount Home Loan fixed terms for owner occupiers with an LVR below 80%.
The rates are now among the very lowest in the Mozo database. Here’s how they look:
- 1-year term: 1.99% (2.78% comparison rate*)
- 2-year term: 1.99% (2.71% comparison rate*)
- 3-year term: 1.99% (2.64% comparison rate*)
“It’s obvious that there's been real competition amongst home lenders of late, and we’ve seen that played out in the latest offers rolled out by Bank of Us and Homestar,” said Mozo Banking Expert, Peter Marshall.
“They’re all eager to get as much business in the door, and with the cash rate expected to stay very low for years it’s no surprise to me that lenders are taking advantage of that and offering the sharpest rates they possibly can.”
Unfortunately for borrowers on the mainland, the Bank of Us special is only available to Tasmanians. However, online lender Homestar has also launched a new fixed rate offer which is more widely available.
Well known for rock bottom rates, including the Star Essentials Home Loan which features one of the lowest variable rates in our database, Homestar has taken rates even lower with their new Star Essentials Fixed Home Loan.
Launched last Friday, the loan includes a 2-year fixed rate of just of 2.06% (2.49% comparison rate*) which makes it one of the lowest fixed rates available in the Mozo database.
Here’s a quick snapshot:
“Generally we see online lenders like Homestar able to offer slightly better rates than traditional banks because of their lower overheads and lack of branches, plus they're geared to operating online which means they can also keep their staff overheads as low as possible,” said Marshall.
To put the new fixed rates from Bank of Us and Homestar into perspective, the average 2-year fixed rate for owner occupiers in the Mozo database is currently 2.59%.
As our Australian home loan statistics page shows, fixed rates have been steadily falling ever since the Reserve Bank cut the cash rate back in June 2019.
However, they’ve really gone off a cliff since March with the average 2-year fixed rate (for instance) dropping from 3.13% then to just 2.59% this month.
Want to learn more about Homestar’s newest fixed rate offer? Check out our full review, or head on over to the Mozo home loans comparison page for the latest fixed and variable rates from a host of lenders.
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