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.
• 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.