Homestar shows no sign of slowing down, passes on full 0.25% cut

Niko Iliakis

03 Mar 2020

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The RBA has just lowered official interest rates by 0.25%, and online lender Homestar has wasted no time in announcing it will be passing on the full cut. The changes will come into effect April 1 for existing customers, and will be effective immediately for new customers.

Both investors and owner occupiers will be able to take advantage of much lower rates, with variable rates for the Star Essentials Home Loan dropping as low as 2.49% p.a. (2.52% p.a. comparison rate*).

The decision puts Homestar in exclusive company. Since the RBA began hacking away at official interest rates back in June, Homestar has passed on the full cut on all four occasions. At the time of writing, only one other lender tracked by Mozo has done the same.

“At Homestar we always strive to deliver great customer experience and timely rate decisions following each RBA announcement. Since releasing our new product suite in 2014, all owner occupied loans have received the RBA rate change for variable loans in full,” said Homestar Finance CEO, Andrew Chepul.

The changes

• 0.25% reduction to Star Essentials Home Loan for owner occupiers making principal and interest repayments. Rates now start at 2.49% p.a. (2.52% p.a. comparison rate*).

• 0.25% reduction to Star Gold Home Loan for owner occupiers making principal and interest repayments. Rates now start at 2.44% p.a. (2.47% p.a. comparison rate*).

• 0.25% reduction to Variable Rate Home Loan for investors making principal and interest repayments. Rates now start at 2.89% p.a. (2.92% p.a. comparison rate*).

• 0.25% reduction to Variable Rate Home Loan for investors making interest only repayments. Rates now start at 3.14% p.a. (3.17% p.a. comparison rate*).

RELATED: RBA cuts interest rates to 0.50% in March, so how will your bank respond?

Right now, the market average for a $400,000 variable rate home loan (owner occupier, 80% LVR) sits at 3.67% p.a. While that stands to drop a bit in the coming weeks as lenders revise their home loan rate sheets, the rates on offer from Homestar still blow it out of the water.

Assuming you’re paying 3.67% p.a. on a $400,000 loan over 25 years, you could save $241 a month by switching to Homestar’s Star Essentials Home Loan, or $2,892 over a year. That's a lot of money back in your pocket.

We’ve included a summary of the Star Essentials Home Loan below, but if you’re wondering how it compares to other offerings, make our home loan comparison page your next stop.

Promoted

Homestar Star Essentials Home Loan
  • Variable rates from 2.49% p.a. (2.52% p.a. comparison rate*)

  • Free extra repayments and redraw facility

  • Offset account available

Following today’s rate cut, the Star Essentials Home Loan is looking much more appealing. Owner occupiers will be able to take advantage of rates starting as 2.49% p.a. (2.52% p.a. comparison rate*), which put it among the best value home loans in our database. You’ll also be able to make weekly, fortnightly or monthly repayments, pay off your loan faster without penalty, and access a free redraw facility if you ever decide you need those funds back. Just keep in mind that there are a few fees that come with this one, namely the $248.08 valuation fee and $264 legal fee.

*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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