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

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

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




Comparison Rate


Reduce Home Loans

Rate Buster Offset Fee Free Variable



Owner occupiers, max LVR 70%

Homestar Finance

Basic Refinance Loan



Owner occupiers, max LVR 70%

Mortgage House

Pure and Simple 30



Owner occupiers, max LVR 30%


Elite Home Loan



Owner occupiers, max LVR 80%

Pacific Mortgage Group

Standard Variable Home Loan



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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Learn more about home loans

What happens to my home loan when interest rates rise?

If you are on a variable rate home loan, every so often your rate will be subject to increases and decreases. Rate changes are determined by your lender, not the Reserve Bank of Australia, however often when the RBA changes the cash rate, a number of banks will follow suit, at least to some extent. You can use RateCity cash rate to check how the latest interest rate change affected your mortgage interest rate.

When your rate rises, you will be required to pay your bank more each month in mortgage repayments. Similarly, if your interest rate is cut, then your monthly repayments will decrease. Your lender will notify you of what your new repayments will be, although you can do the calculations yourself, and compare other home loan rates using our mortgage calculator.

There is no way of conclusively predicting when interest rates will go up or down on home loans so if you prefer a more stable approach consider opting for a fixed rate loan.

What is a variable home loan?

A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.

Why is it important to get the most up-to-date information?

The mortgage market changes constantly. Every week, new products get launched and existing products get tweaked. Yet many ratings and awards systems rank products annually or biannually.

We update our product data as soon as possible when lenders make changes, so if a bank hikes its interest rates or changes its product, the system will quickly re-evaluate it.

Nobody wants to read a weather forecast that is six months old, and the same is true for home loan comparisons.

What is a specialist lender?

Specialist lenders, also known as non-conforming lenders, are lenders that offer mortgages to ‘non-vanilla’ borrowers who struggle to get finance at mainstream banks.

That includes people with bad credit, as well as borrowers who are self-employed, in casual employment or are new to Australia.

Specialist lenders take a much more flexible approach to assessing mortgage applications than mainstream banks.

Mortgage Balance

The amount you currently owe your mortgage lender. If you are not sure, enter your best estimate.

What factors does Real Time Ratings consider?

Real Time RatingsTM uses a range of information to provide personalised results:

  • Your loan amount
  • Your borrowing status (whether you are an owner-occupier or an investor)
  • Your loan-to-value ratio (LVR)
  • Your personal preferences (such as whether you want an offset account or to be able to make extra repayments)
  • Product information (such as a loan’s interest rate, fees and LVR requirements)
  • Market changes (such as when new loans come on to the market)

How personalised is my rating?

Real Time Ratings produces instant scores for loan products and updates them based what you tell us about what you’re looking for in a loan. In that sense, we believe the ratings are as close as you get to personalised; the more you tell us, the more we customise to ratings to your needs. Some borrowers value flexibility, while others want the lowest cost loan. Your preferences will be reflected in the rating. 

We also take a shorter term, more realistic view of how long borrowers hold onto their loan, which gives you a better idea about the true borrowing costs. We take your loan details and calculate how much each of the relevent loans would cost you on average each month over the next five years. We assess the overall flexibility of each loan and give you an easy indication of which ones are likely to adjust to your needs over time. 

What is the flexibility score?

Today’s home loans often try to lure borrowers with a range of flexible features, including offset accounts, redraw facilities, repayment frequency options, repayment holidays, split loan options and portability. Real Time Ratings™ weights each of these features based on popularity and gives loans a ‘flexibility score’ based on how much they cater to borrowers’ needs over time. The aim is to give a higher score to loans which give borrowers more features and options.

What is the average annual percentage rate?

Also known as the comparison rate, or sometimes the ‘true rate’ of a loan, the average annual percentage rate (AAPR) is used to indicate the overall cost of a loan after considering all the fees, charges and other factors, such as introductory offers and honeymoon rates.

The AAPR is calculated based on a standardised loan amount and loan term, and doesn’t include any extra non-standard charges.

Mortgage Calculator, Loan Purpose

This is what you will use the loan for – i.e. investment. 

What is appreciation or depreciation of property?

The increase or decrease in the value of a property due to factors including inflation, demand and political stability.

Does Real Time Ratings' work for people who already have a home loan?

Yes. If you already have a mortgage you can use Real Time RatingsTM to compare your loan against the rest of the market. And if your rate changes, you can come back and check whether your loan is still competitive. If it isn’t, you’ll get the ammunition you need to negotiate a rate cut with your lender, or the resources to help you switch to a better lender.

Do other comparison sites offer the same service?

Real Time RatingsTM is the only online system that ranks the home loan market based on your personal borrowing preferences. Until now, home loans have been rated based on outdated data. Our system is unique because it reacts to changes as soon as we update our database.

Mortgage Calculator, Loan Results

These are the loans that may be suitable, based on your pre-selected criteria.