UBank cuts home loan fixed rates to record low of 1.75%

By Katherine O'Chee · · 3 min read
Fact Checked
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Woman diving to illustrate falling home loan rates

Online lender UBank today made cuts across all of its fixed rate home loans, bringing its three-year offer down to a new low of 1.75%. 

For a limited time, if you’re an owner occupier making principal and interest repayments, you can lock in ultra competitive three-year fixed rates from 1.75% (2.22% comparison rate*) with UBank.

While UBank’s UHomeLoan (Fixed) was already the rate leader for three-year terms in the Mozo database, today’s 20 basis point rate cut raises it even further above the rest of the competition. The next best three-year rate after UBank’s is 1.97% - 22 basis points higher. 

Comparing it more broadly to other lenders within our database, UBank now sits a massive 62 basis points below the three-year fixed rate average of 2.37%. 

The only catch is you have to get in quick. To be eligible for UBank's new rate, you must apply by 26 February 2021 and have your application settled within 90 days. 

Read on for a quick snapshot of other features that come with the UBank UHomeLoan (Fixed).

UBank UHomeLoan (Fixed)
  • Three-year fixed rates from 1.75% (2.22% comparison rate*) (apply by 26 Feb 2021)
  • Free extra repayments up to $20,000 p.a.
  • 2020 Mozo Experts Choice Award winner^
Find out more

The UBank UHomeLoan doesn’t hold back on perks, offering borrowers some of the lowest rates out there, plus a range of flexible options at your disposal. This includes the ability to match your repayments to your pay cycle, make extra repayments up to $20k a year (no redraws available), and split your loan into fixed and variable rates. There’s just a $395 application fee to budget for, and you won’t have to worry about any other upfront or ongoing service fees. It’s little wonder why the UBank UHomeLoan (Fixed) snagged two 2020 Mozo Experts Choice Awards for best Fixed Home Loan and best Investor Fixed Home Loan.

How much could switching save you? 

“Rates are at an all-time low. If you’ve been toying with the idea of fixing all or some of your home loan, then I encourage you to explore the most competitive rates, as you could be saving thousands," says UBank's chief executive, Philippa Watson.

In fact, since May 2019, UBank has more than halved its 3-year fixed loan for owner occupiers paying principal and interest (P&I) - from 3.59% (3.97% comparison rate*) to 1.75% (2.22% comparison rate*).

UBank says this rate drop could potentially save borrowers $16,740 in interest payments over the full 3-year fixed term (or $465 per month), on a $480,000 owner occupied P&I home loan.

RELATED: How refinancing your home loan in 2021 could save you thousands

No one left behind in UBank rate cuts

UBank’s fixed rate cuts don’t stop there. The lender today also slashed up to 35 basis points (bps) off its other terms. Here were some of its more notable moves for owner occupiers as well as investors.

For owner occupiers: 

  • UBank’s one-year rate for P&I repayments now starts with ‘1’ after falling 15 bps to 1.99% (2.33% comparison rate*).
  • Meanwhile its five-year rate for P&I repayments dropped by 35 bps to 2.24% (2.33% comparison rate*), pushing its rank up to fifth place in the Mozo database.

For investors: 

  • UBank’s one-year rate for P&I repayments is now the lowest in our database after falling by 15 bps to 2.14% (2.71% comparison rate*). 
  • Its three-year rate for P&I repayments also made it to number one after a 20bp drop down to 2.09% (2.60% comparison rate*). It joins the Police Credit Union in that top spot. 
  • Meanwhile UBank’s one-year, three year and five-year rates for interest only repayments have all become the second most competitive options in their respective categories. Its one-year rate now starts from 2.29% (2.72% comparison rate*); its three-year rate from 2.24% (2.64% comparison rate*); and its five-year rate from 2.64% (2.73% comparison rate*).

Head on over to the UBank home loans page to learn even more about its offers.  Or if you’re interested in weighing up UBank against other providers in the market, make our fixed rate home loans comparison hub your next stop.

^Check out the full list of winners and our methodology over at our 2020 Mozo Experts Choice Home Loan Awards page.

* 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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