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Cash rate held again, but home loan rates still falling

Cash rate held again, but home loan rates still falling

The Reserve Bank of Australia has again held the cash rate at a record low of 0.25 per cent today, however dozens of home loan lenders have still cut rates out of cycle in June.

The Reserve Bank of Australia has not moved the cash rate since its emergency cut on March 19 as a result of the impacts of the COVID-19 pandemic.

But in good news for homeowners and would-be-buyers, home loan rates have never been lower, and have continued to fall since the last rate cut in March.

Low rates keeping homeowners’ heads above water

Falling home loan rates may have come at an ideal time. Hundreds of thousands of struggling Australians, who found themselves reaching out for hardship support and pausing mortgage repayments, now have the opportunity to ask their lenders for reduced home loan rates or consider refinancing to more affordable mortgages.

RateCity data found that over the last month, 41 lenders have cut home loan rates out of cycle. 19 lenders have made cuts to at least one variable home loan rate, and 22 lenders have made cuts to at least one fixed home loan rate.

Australia saw a new lowest variable home loan rate of 2.17 per cent in June from online lender, Freedom Lend.

Bank of Us also exclusively gave Tasmanian residents the first home loan starting with a 1, cutting its 1-, 2- and 3-year fixed Flexi Discount Special to 1.99 per cent.

Smaller lenders may have had to reduce their home loan rates in a battle to keep a piece of the home loan pie. Typically, during a downturn, customers may turn to the big four banks for stability and security.

However, even the big four banks reduced their home loan rates during the low-rate home loan war.

  • NAB cut both its base variable and some fixed home loans by 10 – 15 basis points.
  • Westpac cut some variable and fixed rate home loans by 10 – 24 basis points.

Lowest home loan rates on RateCity database

If you’re considering refinancing to a lower rate home loan, or if you want some ammunition to call your bank and ask for a lower home loan rate, here are the current lowest home loans on the RateCity database.

Variable home loans

Home loanAdvertised rateComparison rate
Freedom Lend Freedom Variable Home Loan Special

2.17%

2.17%

Reduce Home Loans Super Saver

2.19%

2.19%

Homestar Finance Star Gold Home Loan

2.29%

2.32%

Note: data accurate as of 07.07.2020.

Fixed home loans

Home loanAdvertised rateComparison rate
Bank of Us FlexiDiscount 2-Years Fixed Special*

1.99%

2.71%

Homestar Finance Star Essentials 2 years Fixed

2.06%

2.49%

Greater Bank Great Rate 1 Year Fixed**

2.09%

3.53%

Note: data accurate as of 07.07.2020.

*Bank of Us home loan - Tasmanian residents only.

** Greater Bank home loan - NSW, ACT and QLD residents only.

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This article was reviewed by Finance Writer Alison Cheung before it was published as part of RateCity's Fact Check process.

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