Greater Bank offering 3.59% interest-only loans

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There are still a surprising number of lenders offering interest-only rates under 4 per cent, a new study of the mortgage market has found.

At the end of July 2018, the average rate for all the variable, owner-occupied, interest-only mortgages listed on RateCity was 4.77 per cent.

This compares to an average rate of 4.39 per cent at the end of March 2017, which was when APRA, the banking regulator, called on lenders to limit their interest-only lending.

Greater Bank has a one-year fixed-rate interest-only loan that starts at 3.59 per cent, although the comparison rate is 4.67 per cent.

Mortgage House, CUA, Homestar Finance, Newcastle Permanent, Move Bank, BCU, Suncorp Bank and State Custodians are some of the other Australian lenders that offer interest-only mortgages for less than 4 per cent.

Here are some of the cheapest interest rates in Australia for owner-occupiers who want a $400,000 interest-only mortgage with a 30-year term and a maximum loan-to-value ratio (LVR) of 80 per cent:

Lender Product Advertised rate Comparison rate
Greater Bank Ultimate Home Loan (1yr fixed) 3.59% 4.67%
Mortgage House Affordable First Home Buyer Special 3.64% 3.68%
Homestar Finance Variable Owner Occupied Home Loan 3.74% 3.79%
CUA Balanced Variable (construction) 3.75% 3.67%
Newcastle Permanent Premium Plus Package (1yr fixed) 3.79% 4.75%
Move Bank Flexi Fixed Home Loan (1yr fixed) 3.79% 4.81%
BCU OMG Home Loan 3.89% 3.84%
Suncorp Bank Home Package Plus (2yr fixed) 3.89% 4.71%
State Custodians Low Rate Home Loan 3.93% 3.94%

Please note that the cheapest interest-only home loan may not be the best interest-only home loan for your situation.


^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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