Borrowers dump banks as rivals slash rates


16 Mar 2021

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As the property market sizzles and rival lenders slash rates in some of the fiercest mortgage competition we’ve seen in years, borrowers are flocking to comparison sites to hunt out bargain home loan deals.

Interest in cheaper home loans is soaring, putting the big banks under pressure to keep their customers. Competition is particularly fierce on fixed rates, headlined by UBank’s new 3-year rate of 1.75% (2.22% comparison rate*) and Bank of Queensland's new 2-year rate of 1.88% (2.86% comparison rate*).   

Meanwhile online lenders like Athena and Homestar are rolling out unbelievably low variable rates for refinancers and borrowers with big deposits.

Mozo Money Expert Tom Godfrey said, “Savvy borrowers could save tens of thousands on their home loan by taking the opportunity to shop around and switch.  Given the savings on offer, it's hardly surprising we're seeing a shift to smaller lenders away from the big banks.”

Top Fixed Rate Home Loans

UBank UHomeLoan
  • 1.75% fixed rate for 3 years (2.22% comparison rate*) - Limited time only!

  • Free extra repayments up to $20,000 p.a.

  • Mozo Experts Choice Home Lender Bank of the Year 2020

The details:

UBank is the online bank created by NAB to shake things up in the borrowing and savings world, and boy have they succeeded! Bringing to the table super competitive interest rates, zero upfront or ongoing fees and speedy online processes, it’s little wonder UBank has become such a success story. This ultra low 3 year fixed rate home loan is available for loans of $200,000 or more with a minimum deposit of 20%.

Bank of Queensland Discount Fixed Rate
Bank of Queensland
  • 1.89% fixed rate for 2 years (3.05% comparison rate*)

  • $3,000 cashback for refinancers (T&Cs apply)

  • Free extra repayments up to $5,000 p.a.

The details:

Bank of Queensland has just dropped this incredibly low 2 year fixed rate home loan, which lets you guarantee your monthly repayments while still taking advantage of flexible features like the ability to make free extra repayments up to $5,000 a year and split your loan between fixed and variable. On top of that, refinancers will also score a bonus $3000 cashback when you switch your loan to the award-winning Bank of Queensland for a limited time. Available to borrowers with a 20% deposit or more.

People's Choice Credit Union Fixed Rate Home Loan
People's Choice Credit Union
  • 1.89% fixed rate for 3 years (rate (3.03% p.a. comparison rate*)

  • Free extra repayments up to $10,000 a year

  • No upfront fees

The details:

People's Choice is one of Australia's largest credit unions and their competitive Fixed Rate Home Loan shows why they are such a popular alternative to the big banks. Borrowers can lock in a 3 year rate under 2.00%, there are no upfront fees and you’ll be able get ahead on your loan by making use of the extra repayments feature (free up to $10,000 per year). What better way to get peace of mind over your mortgage repayments while still having the flexibility to pay extra when you can afford it?

Top Variable Home Loans

Athena Celebrate Variable Home Loan
  • 2.19% variable rate (2.39% comparison rate*)

  • No application, valuation or ongoing fees

  • Minimum 40% deposit required

The details:

The Celebrate Variable Home Loan from Athena features a super low rate for refinancers and a customer first approach, helping Aussies around the country save money and pay off their mortgages sooner. Plus, to reward borrowers for paying down their home loan, Athena will now automatically lower your rate as you pay down your loan. Available to borrowers with a 40% deposit or equity in their property, this  Athena Home Loan is shaking up the mortgage market.

Homestar Star Gold Home Loan
  • 1.79% variable rate (1.84% comparison rate*)

  • No ongoing fees + free additional repayments and online redraws

  • Available to owner occupiers in metro areas with 40% or more equity in their home

The details:

Homestar is one of Australia's oldest non-bank lenders, with a mission to make home loans more affordable. If you've got at least 40% equity in your home, it's hard to beat the new Homestar Star Gold Home Loan with a killer 1.79% variable rate (1.84% comparison rate). Flexible features include the ability to make unlimited free extra repayments and free online redraws, plus there are no ongoing fees to pay. Available for loans of $150K - $750K with a 60% LVR.

*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.

^See information about the Mozo Experts Choice Home loans Awards

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