Don't wait for the RBA, join RateCity's Under 4% club today



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Sick of waiting for the Reserve Bank to deliver you a rate cut? With the cash rate on hold for the past 11 months, it could be time to take matters into your own hands.

RateCity’s data shows that while the bigger banks have snubbed customers by lifting their rates over the last six months, a smattering of smaller lenders are still actively competing at the pointy end of the market with rates as low as 3.85 per cent.

There are currently 18 lenders in RateCity’s ‘Under 4% club’, an elite group of lenders vying for customers looking for a better deal.

While there are some caveats on these rock bottom prices such as deposit size, loan amount and whether you are an owner-occupier or an investor, with over 30 different products to choose from there is a healthy dose of variety at this level.

With the cash rate at a historic low of 2 per cent, it’s no wonder refinancing is making a comeback as some borrowers move towards home loans with low interest rates attached.

RateCity’s analysis of RBA data shows that over the last year, non-bank lenders have become increasingly more competitive than their main stream counterparts.

What this means is that the market is actually ripe for the picking, particularly if you are willing to pick up your home loan and take it to another lender.

RateCity’s Under 4% Club – today’s top five members

Lender

Product

Rate

Comparison Rate

Requirements

Reduce Home Loans

Rate Buster Offset Fee Free Variable

3.85%

3.86%

Owner occupiers, max LVR 70%

Homestar Finance

Basic Refinance Loan

3.86%

3.90%

Owner occupiers, max LVR 70%

Mortgage House

Pure and Simple 30

3.89%

3.89%

Owner occupiers, max LVR 30%

iMortgage

Elite Home Loan

3.94%

3.95%

Owner occupiers, max LVR 80%

Pacific Mortgage Group

Standard Variable Home Loan

3.95%

3.95%

Owner occupiers, max LVR 90%

For a full list of the lowest variable rates on the market, click here. For more information on comparison rates click here.

Tips for refinancing

Before you tear up your existing home loan, your first port of call should be your own bank. Find out what interest rates other lenders are offering, and call your lender. If you’ve been a loyal customer and have a decent amount of equity in your home, the chances are, they might be willing to negotiate.

If your lender isn’t prepared to budge, then you’ve already done the research to find lenders offering under your current rate – just be sure that the product fits your personal needs and isn’t loaded with set up or ongoing fees.  If they are, ask if they’ll waive them for you – you might find that they’ll be happy to write them off if it means securing your business.

One other tip for refinancers is to try and avoid inadvertently extending the length of your home loan. Your new lender might offer you a 30 year loan, but if you are already 10 years into your existing loan, this will blow out the time you take to repay it by and extra 10 years, potentially adding tens of thousands of dollars to the final cost of your loan.

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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