The RBA might have held off on lowering official interest rates at its February meeting, but that doesn’t mean you have to wait until they finally pull the trigger to snag a more competitive home loan interest rate.
Right now, the average home loan variable rate in the Mozo database sits at 3.73% p.a., but there are several lenders that offer much lower rates, including a handful that dipped below the 3% mark months ago. We’ve compiled a handful of lenders that should be on every mortgage holder’s radar.
Athena Liberate Variable Home Loan
Variable rates from 2.84% p.a. (2.80% p.a. comparison rate*)
The home loan playing field is pretty packed at the moment, but Athena has managed to stand out thanks to its habit of passing on RBA rate cuts in full. Its Variable Home Loan option is available to both homebuyers and refinancers, and offers interest rates as low as 2.84% p.a. (2.80% p.a. comparison rate*). You’ll be able to make free extra repayments, plus access a free redraw facility if it turns out you want those funds back. What’s more, loyal customers are rewarded with a 0.01% reduction on their interest rate each year for the first five years. A lack of application fee is just the icing on the cake.
Homestar Star Essentials Home Loan
Variable rates from 2.74% p.a. (2.77% p.a. comparison rate*)
Free extra repayments and redraw facility
Offset account available
In the race to lower interest rates, Homestar has always been at the front of the pack. Last year, it passed on the full 0.25% cut to its home loan customers on all three occasions, leaving its Star Essentials Home Loan looking sharper than ever with a 2.74% p.a. variable rate (2.77% p.a. comparison rate*). It also comes with a number of features to help you save on interest, such as the ability to make free extra repayments and access a redraw facility. There is a $248.08 valuation fee, $264 legal fee, and a $535 discharge fee, but the discharge fee will be waived if the loan goes to full term. And if you complete a loan application by the end of February, Homestar will donate $250 to the Australian bushfire appeal.
UBank UHomeLoan - Discount Offer
2.84% variable interest rate (2.84% p.a. comparison rate*) for loans over $200,000
Rounding out the list of lenders that passed on last year’s three rate cuts in full is NAB subsidiary UBank. The online bank has gotten into plenty of people’s good books by combining the great rates of a smaller lender with the security of a big bank. With its UHomeloan Discount Offer, you’ll be looking at variable interest rates of 2.84% (2.84% p.a. comparison rate*) on amounts above $200,000, plus the option to make free extra repayments and access a redraw facility. Just keep in mind that the UHomeLoan Discount Offer is available on new variable rate UHomeLoan applications. Unfortunately, that means if you’ve already got a UHomeLoan you won't be eligible to refinance.
The loans.com.au Smart Home Loan gives homebuyers a lot to get excited about, starting with the excellent 2.88% p.a. variable rate (2.90% p.a. comparison rate*). You’ll be able to pay down your loan weekly, fortnightly or monthly, and make extra repayments if you want to pay it down faster. And if at any point you decide those funds would be better served back in your pocket, you can easily retrieve them with the free redraw facility. You’ll just need to keep an eye out for a few fees, namely the $220 valuation fee and $300 settlement 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.