UBank joins major lenders in home loan rate cuts as lending tightens

Woman in hat cutting hedge as home loan interest rates drop.

It’s been a busy week in the world of home loan and property news. We’ve seen record-breaking rises in property prices, with an annual increase that has outpaced the last three decades of growth.

Then in the regulatory department, national leaders have signalled future home loan reforms to temper rising household debt levels. And it looks like plans are already being implemented, with APRA tightening mortgage serviceability requirements, meaning borrowers will have to prove they can theoretically meet higher repayments rates, and thus may find it more difficult to get a home loan.

And while the Reserve Bank of Australia (RBA) once again kept the cash rate hovering at 0.10%, plenty of lenders have been busy with their own rate-cutting scissors recently. UBank has just announced a 15 basis point (bp) reduction to its UHomeLoan variable rate after cutting it’s fixed loan options last month.

You can check out more rate cut action from the last month in our October home loans snapshot

Or, find details below on a few of the variable and fixed loans that have been whittled down recently – with some now leading the low rate home loan race in Mozo's database.

Variable home loan rate drops

UBank UHomeLoan
  • 2.19% p.a. variable interest rate (2.19% p.a. comparison rate*)
  • No annual fees

UBank has just shaved another 15bp off its UHomeLoan, bringing the variable rate down to a competitive 2.19% p.a. with the same comparison rate for owner occupiers with up to a 80% loan-to-value ratio (LVR). With no ongoing annual loan fees to fork out and free extra repayments and redraws, it’s presenting a solid deal in this fast-moving interest rate environment.

Great Southern Bank Basic Variable
  • 2.39% p.a. Variable interest rate (2.44% p.a. comparison rate*)
  • $3,000 cashback for refinancers (conditions apply)
Find out more

This variable home loan from Great Southern Bank saw a notable 20bp rate cut in late September, bringing the interest rate offer for owner occupiers who can make a minimum 20% deposit to 2.39% p.a. (2.44% p.a. comparison rate*). Other features include flexible repayment periods, free extra repayment and redraws, and a $3,000 cashback offer (on loan amounts over $250,000 with maximum 80% LVR, applied for by 31 January, 2022 and settled by 30 April, 2022).

Macquarie Basic Home Loan
  • 2.14% p.a variable interest rate (2.14% comparison rate*)
  • No upfront or ongoing fees

Macquarie made a number of rate cuts over the last month, with reductions ranging depending on borrower and loan types. It brought the Basic Home Loan down 15bp to 2.14% p.a. (2.14% p.a. comparison rate*). This is for customers with a 60% LVR, so you’ll need a more sizable deposit or equity in your home to access it. Rates rise to 2.69% p.a. (2.69% p.a. comparison rate*) for LVRs between 80% and 90%. But fees are low across the board – aside from a $400 discharge fee you won’t be charged any ongoing fees nor any upfront fees.

Fixed home loan rate drops

Greater Bank Great Rate Home Loan (Fixed)
  • 1.59% (2.10% comparison rate*) 2-year fixed rate
  • No ongoing fees
Find out more

Greater Bank has made significant rate reductions across various offerings recently, but the 20bp cut to this two-year fixed rate brought it down to an ultra low 1.59% p.a. (2.10% p.a. comparison rate*). This reduction makes it the lowest rate recorded in the Mozo database for two-year fixed terms that owner occupiers with a LVRs up to 90% can access. Borrowers seeking out further value may also appreciate that there are no ongoing fees (although you will have to budget for a $180 settlement fee and $300 discharge fee, plus at-cost legal fees).

UBank UHomeLoan (Fixed)
  • 1.85% p.a. (2.13% p.a. comparison rate*) 3-year fixed rate
  • Manage your loan online

When it comes to 3-year fixed rates, UBank has taken out the title of the lowest in Mozo’s database after slicing 10bp from the fixed UHomeLoan last month. It's now a competitive 1.85% p.a. (2.13% p.a. comparison rate*) 3-year fixed rate. This loan also offers features like flexible repayment periods, easy online management and free extra repayments up to $20,000 during fixed rate terms. Plus, if you settle the loan before 30 September 2022, the standard $395 application fee will be waived.

Want to explore more options? Head to our home loan comparison 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, loan amount and term entered. 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.

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