The Reserve Bank is unlikely to cut the cash rate when it meets on Tuesday, but lenders are forging ahead with a new round of home loan rate cuts in a veritable bonanza for borrowers. Variable and fixed home loan rates are dropping under 2.00% ahead of the RBA's decision, and there are some big savings on offer.
Online and rival bank lenders are leading the charge, with loans.com.au and Homestar joining the exclusive new club of lenders offering home loans that start with a '1'. Meanwhile popular bank lenders like HSBC and ING have dropped their rates close to the magic 2.00% mark.
Mozo Director Kirsty Lamont says, "We're now seeing a huge gap opening up between the market leading rates and the average variable rate of 3.40%. It's an ideal time to review your current home loan as there are some serious savings potentially available for borrowers who are prepared to switch.
So if you'd like to start saving on your home loan sooner rather than later, take at look at some of the most competitive new rates on the market below and see if you can find yourself a better deal.
TOP NEW HOME LOAN RATES - AUGUST 2020
loans.com.au Smart Booster Home Loan
1.99% discount variable rate for 1 year
Rolls over to low ongoing 2.57% (2.55% comparison rate*)
No monthly fees plus unlimited free redraws and extra repayments
Loans.com.au has been taking on the banks with low rate loans for close to a decade, and the new Smart Booster Home Loan might just be their best yet. Available to borrowers with a 20% deposit, this headline-stealing home loan is designed to help you boost your savings, build your equity and own your own home, sooner. Flexible features include free extra repayments and redraw, and there are no ongoing monthly or annual fees.
Homestar Star Classic Fixed Special Home Loan
1.98% fixed rate for 1 year (2.51% p.a. comparison rate*)
Free extra repayments (up to $20,000 annually)
Borrow between $150,000 and $850,000
The Star Classic Owner Occupier Special boasts a killer new 1 year fixed rate that reverts to a low 2.49% (2.51% comparison rate*), putting it among only a handful of loans with headline rates below 2.00%. Refinancers and new purchasers will be able to enjoy plenty of flexibility, including the option to pay down your loan faster by making extra repayments up to $20,000 year without penalty during the fixed period. You'll also have access to a free online redraw facility.
HSBC 2 Year Fixed Rate Home Loan
2.09% fixed rate for 2 years (2.98% comparison rate*)
This new, market-leading 2 year fixed rate home loan from HSBC is sure to win over plenty of borrowers eager to save on monthly repayments and protect against future rate rises. There are no upfront or ongoing fees and you can choose to make free extra repayments of up to $10,000 each year and split your loan with one of HSBC's competitive variable loans. It's available to borrowers with at least 20% deposit.
*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.