Refinancers rush to cash in on low mortgage rates

Tom Watson

22 Jul 2020

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Australians aren’t known for passing up an opportunity, especially one that puts thousands of dollars back in their pockets. That’s exactly what many savvy homeowners are doing. 

Owner occupiers have been rushing to refinance their mortgages, with a whopping $14.3 billion worth of loans refinanced in June according to ABS figures. The cause? Two RBA cuts certainly helped, sparking a rate war between lenders which has seen rates plummet to new lows.

While some banks have tightened lending requirements in the wake of COVID-19, borrowers with a stable income and a loan-to-value ratio (LVR) below 80% are better positioned to refinance.

And when you consider that switching from the average variable rate in the Mozo database of 3.40% to the lowest variable rate could save a borrower with a $400,000 mortgage $3,084/year on a 30 year loan, it’s hardly surprising that many homeowners are refinancing! 

Ready to get started? See how much you could save by comparing your current rate to some of the hot deals below.

Promoted

loans.com.au Smart Home Loan 80
  • 2.57% variable rate (2.59% comparison rate*)

  • No ongoing fees

  • Unlimited extra repayments and redraws

The verdict

Loans.com.au love offering up low rates, and the Smart 80 home loan is no different with a sharp variable rate of 2.57% (2.59% comparison rate*) for owner occupiers borrowing up to $1 million. It doesn’t stop there though, the loan also comes with handy features such as a free redraw facility and the ability to make free extra repayments. And while there are a couple of one-off upfront fees to budget for, there’s no ongoing service fee to stress about!

Promoted

HSBC Fixed Rate Home Loan
  • 2.09% fixed rate (2.98% comparison rate*) for 2 years

  • No upfront or ongoing service fees

  • Make extra repayments (up to $10k p.a.) for free

The verdict

Oh boy, if you’re looking to lock in a low rate you’re going to love the latest offer from HSBC. The Fixed Rate Home Loan comes with rock bottom fixed rates as low as 2.09% (2.98% comparison rate*) for 2 years - one of the lowest around! There are also no upfront or ongoing fees to worry about (though there is a $300 discharge fee) and borrowers will be able to make extra repayments towards the loan of up to $10k each year.

Promoted

UBank UHomeLoan - Discount Offer
  • 2.49% variable rate (2.49% comparison rate*)

  • Free extra repayments and redraw facility

  • Zero fees

The verdict

UBank aren’t messing around with the latest UHomeLoan - Discount Offer which could be perfect for borrowers on a budget. Not only are there zero fees, UBank’s new, low 2.49% variable rate (2.49% comparison rate*) is sure to be popular with anyone looking to reduce their repayments. Speaking of repayments, borrowers will also be able to make extra repayments towards the loan for free and even dip into them later on (if need be) with the redraw facility.

Promoted

Homestar Star Essentials Home Loan
  • Low 2.39% variable rate (2.39% comparison rate*)

  • No ongoing service fee

  • Unlimited extra repayments

The verdict

Just when you thought variable rates couldn’t get much lower, online lender Homestar has come up with the goods with a super low rate of just 2.39% (2.39% comparison rate*). Need more convincing? No only do borrowers have the option of making free extra repayments to chip away at their loan balance, and to withdraw those extra repayments down the line with the redraw facility, they also won’t have to worry about paying any ongoing fees. Though there may be some upfront fees to budget for.

Promoted

Newcastle Permanent Special Fixed Rate Home Loan
  • 2-year fixed rate of 2.18% (3.72% comparison rate*)

  • No application fee

  • Additional insurance discounts

The verdict

A super low fixed rate and the benefits of a package home loan? That’s what the Newcastle Permanent Fixed Rate Home Loan (Premium Plus Package) is offering. Borrowers will be able to grab a 2-year fixed rate of just 2.18% (3.72% comparison rate*) while also enjoying extra repayments (up to $25k p.a.), a redraw facility ($500 minimum redraw) and discounts off Newcastle Permanent car, home and landlord insurance policies. Just remember to weigh these up against the $395 annual service 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.

Interested in checking out the latest rates from even more lenders? Head on over to the Mozo home loan comparison hub to compare 500 home loans from over 80 different lenders. 

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