Ditch the big banks and check out these stellar offers instead

Niko Iliakis

03 Jul 2019

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Following the RBA’s decision to cut official interest rates - the second month in a row they’ve done so - all eyes were on the big banks. But if you were holding out hope that they would pass on the cut in full, we’ve got bad news.

This time round only ANZ reduced rates by the full 0.25%, and we can probably chalk that up to the massive pressure it faced following its decision last month. The rest were far more stingy, passing on between 0.19% and 0.20%.

This continues a trend of withholding cuts which has seen the Big 4 banks pocket approximately $125 million per month in additional revenue since 2016 - or $3.86 billion in total, according to analysis by Mozo.

“As well as holding back a portion of the official cut,” said Mozo Director Kirsty Lamont, “the big banks all delayed the effective dates of their rate relief. A move that saw them collectively bank $108 million.” 

Right now, there’s plenty of reason to feel disillusioned with the major banks. Thankfully, there are tonnes of smaller lenders who are competing for Aussies’ attention with some top-notch offers. Here's just a selection.

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Athena Variable Home Loan
  • Rates from 3.09% p.a. (3.05% p.a. comparison rate*)

  • Free extra repayments and redraw facility

  • No annual application fees

Athena has made a habit of slashing rates. Following June’s RBA cut, we received word within minutes that it would be passing on the full 0.25% cut to its customers, and July was no different. Now offering rates from 3.09% p.a. (3.05% p.a. comparison rate*), free extra repayments, and a free redraw facility, the Athena Variable Home Loan is a tough one to beat.

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Homestar Star Essentials Home Loan Refinance Special
  • Variable rates from 2.99% p.a. (2.99% p.a. comparison rate*)

  • Free extra repayments and redraw facility

  • No application or ongoing fees

Variable rates from 2.99% p.a. (2.99% p.a. comparison rate*)

As Australia’s oldest online lender, Homestar knows it has a reputation to uphold, and it’s certainly doing a good job of it. Following the RBA's decision this month, it reduced rates by 0.25% for new and existing customers almost immediately. Currently, owner occupiers will be treated to a stellar 2.99% p.a. variable rate (2.99% p.a. comparison rate*) if the loan is between $150,000 and $850,000. On top of that, you can make repayments weekly, fortnightly or monthly, pay down your loan faster without incurring any penalties, and access a free redraw facility.

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Reduce Home Loans Rate Lovers Variable Home Loan
  • Low 2.97% p.a. variable rate (2.97% p.a. comparison rate*)

  • Free extra repayments and redraw facility

  • Offset account available for $10 per month

While Reduce Home Loans didn’t pass on the full cut, it’s still managed to make it in our good books. Its Rate Lovers Variable Home Loan currently sports a super low 2.97% p.a. variable rate (2.97% p.a. comparison rate*), making it one of the more attractive options on the market. You’ll also be able to make free extra repayments, access a free redraw account, and for $10 per month, you can make use of an offset account, which can go a long way towards helping you save on interest.

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UBank UHomeLoan - Discount Offer
  • 3.34% variable interest rate for loans over $200,000 (3.34% p.a. comparison rate*)

  • Free extra repayments and redraw facility

  • No annual fees

A two-time 2019 Mozo Experts Choice Award winner, the UBank UHomeLoan Discount Offer ticks a number of essential boxes. Along with a low 3.34% p.a. variable rate (3.34% p.a. comparison rate*), available for owner occupiers borrowing more than $200,000, you’ll have the ability to make free extra repayments and access a free redraw facility. Application is online, but you'll get plenty of help along the way with UBank's application tracker and 24 hour phone support.

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loans.com.au Smart Home Loan
  • Competitive 3.28% p.a. (3.30% p.a. comparison rate*)

  • No application or ongoing fees

  • Redraw facility available

With loans.com.au’s Smart Home Loan, you’ll find you’re pretty well accommodated for. Along with a competitive 3.28% p.a. variable rate (3.30% p.a. comparison rate*), you’ll get access to a number of nifty features to help you save on interest, such as the ability to make free extra repayments and split your loan between fixed and variable rates.

*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 $150,000 over 25 years.

The above is just a taste of the offers out there at the moment. For a more in-depth look, be sure to check out our variable rate home loan comparison page. And to keep up to date with all the moves lenders make following the RBA cut, be sure to check out our Naughty or Nice table, which will track who’s passed on the full cut and who hasn’t.

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