Has Reduce Home Loans just launched the lowest variable rate mortgage in Australia?

By Tom Watson ·

Just when you thought rates couldn’t get any lower, online lender Reduce Home Loans looks to have taken variable home loan interest rates to a whole new level with its new Super Saver Variable mortgage.

Launched yesterday, the Super Saver Variable home loan is offering owner occupiers a variable rate of just 2.19% (2.19% comparison rate*). 

Not only does that make it the lowest variable rate currently on offer in the Mozo database by a fair margin, it’s also lightyears ahead of the average^ variable rate in our database which sits at 3.43%. 

To put it in perspective, here are some of the lowest variable home loan rates on offer right now from other lenders.

LenderLoanVariable rate
HomestarStar Essentials2.39% (2.39% comparison rate*)
Tic:TocVariable Home Loan2.39% (2.40% comparison rate*)
Pacific Mortgage GroupStandard Variable2.44% (2.44% comparison rate*)
Well Home LoansWell Balanced2.47% (2.50 % comparison rate*)

While the Super Saver certainly has the new variable rate to beat, there are still a number of fixed home loans with lower rates on offer at present. 

For instance, ING’s Fixed Rate Loan (Orange Advantage) has fixed rates as low as 2.09% (3.77% comparison rate*), as does HSBC’s Fixed Rate Home Loan (Premier) 2-year fixed offer of 2.09% (3.10% comparison rate*).

Super Saver Variable loan details

So what do you need to know about the Super Saver Variable home loan? 

Well as we mentioned above, the loan features a variable interest rate of 2.19% (2.19% comparison rate*) for owner occupiers making principal and interest repayments. 

There’s also a minimum loan amount of $50,000 and a maximum amount of $850,000, plus a maximum loan to value ratio (LVR) of 80%. So if you’re using the loan to buy a property, you’ll need a deposit of at least 20%. 

As you’d expect from a low rate loan, there’s not a heap of features attached, but borrowers will have the option of making free extra repayments and withdrawing them down the track with the redraw facility. 

Okay, so here’s where it gets a bit tricky. A glance at the comparison rate would suggest that the loan doesn’t come with any fees, but that isn’t the case. 

While there’s no ongoing service fee, there are a number of upfront costs including a $440 application fee, $297 legal fee, $250 valuation fee and a $150 settlement fee. 

However, Reduce Home Loans actually offers a loyalty rate discount with the Super Saver variable loan of 0.15% after 60 months, which balances out the fees when it comes to calculating the comparison rate. 

RELATED: New home loan approvals fall but refinancing is on the rise

For even more hot home loan offers from a range of banks and lenders, check out the table below or pay a visit to Mozo’s handy home loan comparison table.

^Average is based on a $400,000 variable rate home loan for an owner occupier making principal and interest repayments with an an LVR of 80%. 

Compare home loans - last updated January 23, 2021

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • Smart Booster Home Loan

    1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a.variable for 12 months and then 2.48% p.a. variable
    2.47% p.a.

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required.

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    Details
  • mozo-experts-choice-2020
    UHomeLoan - Discount Offer

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.34% p.a. variable
    2.34% p.a.

    Enjoy a super low rate, $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Free redraw with flexible repayments. Min 20% deposit.

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    Details
  • mozo-experts-choice-2020
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.19% p.a. variable
    2.19% p.a.

    Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^

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    Details
  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    2.09% p.a.
    fixed 2 years
    2.56% p.a.

    Flexible loan structure – create up to six loan accounts with different rate and repayment types. Free redraw from your loan using Macquarie Online.

    Compare
    Details
  • Fixed Home Loan Special Offer

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.89% p.a.
    fixed 2 years
    2.94% p.a.

    Competitive low rates starting from 1.89% (2.94% comparison rate) 2 years fixed for owner occupiers. No monthly account keeping fees & No loan establishment fee.

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    Details
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