New rock bottom home loan rates have borrowers switching
The refusal of the big banks to pass through the latest RBA cut to variable borrowers has sparked a frenzy of home loan comparison and switching activity, as borrowers race to take advantage of the new rock bottom rates on offer from smaller lenders.
Home loan activity on Mozo.com.au is up 300% since last month’s rate cut, and smaller lenders like Athena and Homestar are seeing a surge of interest after once again cutting variable rates in line with the RBA.
The super sharp new variable rates on offer from online and challenger lenders are now more than 1.20% below the average big 4 bank variable rate, while fixed rates are also dropping to new lows.
All of this means that the savings on offer for refinancers are extremely attractive, at over $3,000 a year on a typical $400,000 mortgage for a big 4 bank variable home loan customer switching to one of the new lowest rates on the market.
So if you'd like to crush your mortgage in 2020 and beyond, take a look at some of the top rates on the market right now and get switching!
NEW ROCK BOTTOM RATES - DECEMBER 2020
loans.com.au - Smart Booster Home Loan
- Introductory 1.99% variable rate for 1 year (2.47% comparison rate*)
- Offset account option available
- No application or service fees
Our verdict
Popular online lender loans.com.au offers up an ultra-low one year intro rate and competitive ongoing variable rate of 2.48% to help you pay off your home loan faster and save on interest while you're at it. You can also take advantage of flexible features like an optional offset account and free redraw facility, plus enjoy zero application or ongoing service fees. With the Smart Booster Discount Variable Loan you’ll be able to borrow up to $1 million over a 15-30 year term with 20% deposit.
UBank - UHomeLoan
- 1.95% fixed rate for 3 years (2.27% comparison rate*)
- Free extra repayments up to $20,000 p.a.
- Fast and easy online application
Our verdict
With a fast and simple application process, the security of a super low rate locked in for 3 years and the flexibility to make free additional repayments up to $20,000 a year, this little gem could be a great choice for borrowers who want the peace of mind of fixed repayments plus the freedom to pay the loan off faster. UBank is backed by NAB and has home loan experts on tap to help you through the online application process.
Athena - Celebrate Variable Home Loan
- New 2.19% variable rate (2.19% comparison rate*)
- Zero Athena fees plus free extra repayments and redraw
- Minimum 40% deposit or equity
Our verdict
Online lender Athena has yet again cut rates in line with the RBA and the Athena Variable Home Loan is one of the best value home loans on offer for borrowers with decent equity and an LVR of 60% or less. In addition to a jaw dropping new rate, you'll also enjoy zero upfront or ongoing fees. Plus, to reward borrowers for paying down their home loan, Athena will now automatically lower your rate as you pay off your loan. Available to refinancers and purchasers buying an established property in a major capital or regional city.
HSBC - Fixed Rate Home Loan
- New 1.88% fixed rate for 2 years (2.98% comparison rate*)
- No upfront application or ongoing service fees
- Mozo Experts Choice Fixed Home Loan 2020
Our verdict
This killer 2 year fixed rate home loan gives you the security of monthly repayments while still taking advantage of flexible benefits like the freedom to make free extra repayments up to $10,000 per year. You can even split your loan between fixed and variable rates, and as an added bonus there are no application or ongoing fees to pay. You'll even get a free relationship manager to guide you through the application process. Available to borrowers with a 20% deposit or more.
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Want to compare more home loans? View the latest mortgage rates from over 80 lenders at Mozo's home loan comparison hub.
* 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.
** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. 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.
^See information about the Mozo Experts Choice Home Loan Awards
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