Homestar joins exclusive club with new 1.98% fixed rate home loan

Niko Iliakis

31 Jul 2020

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Lenders have been cutting rates left and right for months now, but it’s still rare for a home loan to offer headline rates below the 2.00% mark. Recently, online lender Homestar came out with a new offer that sees it joining this exclusive club.

The Star Classic Owner Occupied Special sports an impressive 1.98% p.a. fixed rate (2.51% p.a. comparison rate*), which is available for one year before reverting to a still competitive 2.49% p.a. (2.51% p.a. comparison rate*).

That headline rate puts it a full 62 basis points below the average 1-year fixed home loan rate in our database. 

The loan is available to owner-occupiers making principal and interest repayments on loans between $150,000 and $850,000. The LVR is capped at 80%, meaning you’ll need to have a deposit of at least 20% of a property’s value to be eligible.

Importantly, the offer is only available for a limited time, and applications must be received by 30 September 2020 and settled by 31 December 2020. An application fee of $495 will also apply.

Along with the rock-bottom rate, the Star Classic Special comes with a bevy of features, including the ability to split your loan, make extra repayments (maximum $20,000 per year), and access a free redraw facility in case you want those extra funds back in your pocket.

Its rollout comes not too long after loans.com.au unveiled the Smart Booster Home loan, which comes with a discounted variable rate of 1.99% p.a. (2.55% comparison rate*) for the first year, before reverting to 2.57% p.a.

Both offerings represent excellent value for both refinancers and new buyers. Among home loans we track, the average 1-year fixed rate for a $400,000 owner occupier loan is 2.61% p.a., while the average variable rate on a loan of the same size is 3.40% p.a.

We’ve included a snapshot of the Star Classic Owner Occupied Special below. For a look at other offers, visit our home loans comparison page, where you’ll be able to filter your search by rate and type. 

Promoted

Homestar Star Classic Fixed Home Loan
  • 1.98% p.a. fixed rate (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 Occupied Special comes with a fixed rate of 1.98% p.a. (2.51% p.a. 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 ability to make weekly, fortnightly or monthly repayments, pay down your loan faster, and access an online redraw facility. Just keep in mind that extra repayments are capped at $20,000 a year, and there’s an application fee of $495 which you’ll have to budget for.

*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.

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