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Greater Bank slashes fixed rates

Greater Bank slashes fixed rates

Greater Bank has cut its fixed mortgage rates for owner-occupiers and investors by up to 20 basis points.

The greatest rate cut was a 20-basis-point decrease in Great Rate Fixed Home Loans for new and existing owner-occupiers on a 1-year fixed term (interest only and principal and interest loans).

Greater Bank also slashed rates by 15 basis points for the Great Rate Fixed Investment Loan for 1, 4 and 5 year interest-only loan, as well as a 15 basis point decrease for the Great Rate Fixed Investment Loan for 1, 4 and 5 year principal and interest loans. These 15 basis point decreases only affect NSW, ACT & QLD borrowers.

Greater Bank joins other lenders, such as BankWest, AMP Bank and Heritage Bank, in decreasing some of their mortgage rates in the latter part of 2018.

The changes come into effect as of 17 December, 2018.

Greater Bank fixed rate changes

Product

Old  advertised rate

Old comparison rate

New advertised rate

New comparison rate

Rate Change

Great Rate Fixed Home Loan (Interest Only) 1 Year

3.99

4.41

3.79

4.41

-0.2

Great Rate Fixed Home Loan (Interest Only) 5 Years

4.39

4.43

4.29

4.43

-0.1

Great Rate Fixed Home Loan (New Customer) (Interest Only) 1 Year

3.79

4.39

3.59

4.39

-0.2

Great Rate Fixed Home Loan (New Customers) (Interest Only) 5 Years

4.19

4.35

4.09

4.35

-0.1

Great Rate Fixed Home Loan (New Customers) (NSW, ACT & QLD only) 1 Year

3.69

4.38

3.49

4.36

-0.2

Great Rate Fixed Home Loan (New Customers) (NSW, ACT & QLD only) 5 Years

4.09

4.3

3.99

4.26

-0.1

Great Rate Fixed Home Loan (NSW, ACT & QLD only) 1 Year

3.89

4.4

3.69

4.39

-0.2

Great Rate Fixed Home Loan (NSW, ACT & QLD only) 5 Years

4.29

4.38

4.19

4.34

-0.1

Great Rate Fixed Investment Loan (Interest Only) (NSW, ACT & QLD only) 1 Year

4.24

4.69

4.09

4.69

-0.15

Great Rate Fixed Investment Loan (Interest Only) (NSW, ACT & QLD only) 2 Years

4.29

4.66

4.19

4.66

-0.1

Great Rate Fixed Investment Loan (Interest Only) (NSW, ACT & QLD only) 3 Years

4.29

4.62

4.19

4.62

-0.1

Great Rate Fixed Investment Loan (Interest Only) (NSW, ACT & QLD only) 4 Years

4.64

4.71

4.49

4.71

-0.15

Great Rate Fixed Investment Loan (Interest Only) (NSW, ACT & QLD only) 5 Years

4.64

4.7

4.49

4.7

-0.15

Great Rate Fixed Investment Loan (Principal and Interest) 1 Year (NSW, ACT & QLD only)

4.14

4.67

3.99

4.66

-0.15

Great Rate Fixed Investment Loan (Principal and Interest) 2 Years (NSW, ACT & QLD only)

4.19

4.63

4.09

4.61

-0.1

Great Rate Fixed Investment Loan (Principal and Interest) 3 Years (NSW, ACT & QLD only)

4.19

4.59

4.09

4.56

-0.1

Great Rate Fixed Investment Loan (Principal and Interest) 4 Years (NSW, ACT & QLD only)

4.54

4.66

4.39

4.61

-0.15

Great Rate Fixed Investment Loan (Principal and Interest) 5 Years (NSW, ACT & QLD only)

4.54

4.65

4.39

4.59

-0.15

Ultimate Fixed Investment Loan (Interest Only) (NSW, ACT & QLD only) 1 Year

4.09

4.97

3.99

4.97

-0.1

Ultimate Fixed Investment Loan (Interest Only) (NSW, ACT & QLD only) 2 Years

4.09

4.93

4.04

4.93

-0.05

Ultimate Fixed Investment Loan (Interest Only) (NSW, ACT & QLD only) 3 Years

4.14

4.9

4.09

4.9

-0.05

Ultimate Fixed Investment Loan (Interest Only) (NSW, ACT & QLD only) 4 Years

4.45

4.96

4.39

4.96

-0.06

Ultimate Fixed Investment Loan (Interest Only) (NSW, ACT & QLD only) 5 Years

4.49

4.97

4.39

4.97

-0.1

Ultimate Fixed Investment Loan (Principal and Interest) (NSW, ACT & QLD only) 1 Year

3.99

4.86

3.89

4.85

-0.1

Ultimate Fixed Investment Loan (Principal and Interest) (NSW, ACT & QLD only) 2 Years

3.99

4.81

3.94

4.8

-0.05

Ultimate Fixed Investment Loan (Principal and Interest) (NSW, ACT & QLD only) 3 Years

4.04

4.78

3.99

4.77

-0.05

Ultimate Fixed Investment Loan (Principal and Interest) (NSW, ACT & QLD only) 4 Years

4.35

4.85

4.29

4.83

-0.06

Ultimate Fixed Investment Loan (Principal and Interest) (NSW, ACT & QLD only) 5 Years

4.39

4.85

4.29

4.81

-0.1

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Fact Checked -

This article was reviewed by Head of Content Leigh Stark before it was published as part of RateCity's Fact Check process.

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Learn more about home loans

What is a fixed home loan?

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

What is the difference between fixed, variable and split rates?

Fixed rate

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

Variable rate

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.

Split rates home loans

A split loan lets you fix a portion of your loan, and leave the remainder on a variable rate so you get a bet each way on fixed and variable rates. A split loan is a good option for someone who wants the peace of mind that regular repayments can provide but still wants to retain some of the additional features variable loans typically provide such as an offset account. Of course, with most things in life, split loans are still a trade-off. If the variable rate goes down, for example, the lower interest rates will only apply to the section that you didn’t fix.

Cash or mortgage – which is more suitable to buy an investment property?

Deciding whether to buy an investment property with cash or a mortgage is a matter or personal choice and will often depend on your financial situation. Using cash may seem logical if you have the money in reserve and it can allow you to later use the equity in your home. However, there may be other factors to think about, such as whether there are other debts to pay down and whether it will tie up all of your spare cash. Again, it’s a personal choice and may be worth seeking personal advice.

A mortgage is a popular option for people who don’t have enough cash in the bank to pay for an investment property. Sometimes when you take out a mortgage you can offset your loan interest against the rental income you may earn. The rental income can also help to pay down the loan.

When do mortgage payments start after settlement?

Generally speaking, your first mortgage payment falls due one month after the settlement date. However, this may vary based on your mortgage terms. You can check the exact date by contacting your lender.

Usually your settlement agent will meet the seller’s representatives to exchange documents at an agreed place and time. The balance purchase price is paid to the seller. The lender will register a mortgage against your title and give you the funds to purchase the new home.

Once the settlement process is complete, the lender allows you to draw down the loan. The loan amount is debited from your loan account. As soon as the settlement paperwork is sorted, you can collect the keys to your new home and work your way through the moving-in checklist.

When does Commonwealth Bank charge an early exit fee?

When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

  • If you switch your loan from fixed interest to variable rate
  • When you apply for a top-up home loan
  • If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
  • When you prepay the entire outstanding loan balance before the end of the fixed interest duration.

The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay. 

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

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 an interest-only loan? How do I work out interest-only loan repayments?

An ‘interest-only’ loan is a loan where the borrower is only required to pay back the interest on the loan. Typically, banks will only let lenders do this for a fixed period of time – often five years – however some lenders will be happy to extend this.

Interest-only loans are popular with investors who aren’t keen on putting a lot of capital into their investment property. It is also a handy feature for people who need to reduce their mortgage repayments for a short period of time while they are travelling overseas, or taking time off to look after a new family member, for example.

While moving on to interest-only will make your monthly repayments cheaper, ultimately, you will end up paying your bank thousands of dollars extra in interest to make up for the time where you weren’t paying off the principal.

Does the Home Loan Rate Promise apply to discounted interest rate offers, such as honeymoon rates?

No. Temporary discounts to home loan interest rates will expire after a limited time, so they aren’t valid for comparing home loans as part of the Home Loan Rate Promise.

However, if your home loan has been discounted from the lender’s standard rate on a permanent basis, you can check if we can find an even lower rate that could apply to you.

What is the difference between a fixed rate and variable rate?

A variable rate can fluctuate over the life of a loan as determined by your lender. While the rate is broadly reflective of market conditions, including the Reserve Bank’s cash rate, it is by no means the sole determining factor in your bank’s decision-making process.

A fixed rate is one which is set for a period of time, regardless of market fluctuations. Fixed rates can be as short as one year or as long as 15 years however after this time it will revert to a variable rate, unless you negotiate with your bank to enter into another fixed term agreement

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 however fixed rates do offer customers a level of security by knowing exactly how much they need to set aside each month.

What is 'principal and interest'?

‘Principal and interest’ loans are the most common type of home loans on the market. The principal part of the loan is the initial sum lent to the customer and the interest is the money paid on top of this, at the agreed interest rate, until the end of the loan.

By reducing the principal amount, the total of interest charged will also become smaller until eventually the debt is paid off in full.

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.

What is a comparison rate?

The comparison rate is a more inclusive way of comparing home loans that factors in not only on the interest rate but also the majority of upfront and ongoing charges that add to the total cost of a home loan.

The rate is calculated using an industry-wide formula based on a $150,000 loan over a 25-year period and includes things like revert rates after an introductory or fixed rate period, application fees and monthly account keeping fees.

In Australia, all lenders are required by law to publish the comparison rate alongside their advertised rate so people can compare products easily.

Who has the best home loan?

Determining who has the ‘best’ home loan really does depend on your own personal circumstances and requirements. It may be tempting to judge a loan merely on the interest rate but there can be added value in the extras on offer, such as offset and redraw facilities, that aren’t available with all low rate loans.

To determine which loan is the best for you, think about whether you would prefer the consistency of a fixed loan or the flexibility and potential benefits of a variable loan. Then determine which features will be necessary throughout the life of your loan. Thirdly, consider how much you are willing to pay in fees for the loan you want. Once you find the perfect combination of these three elements you are on your way to determining the best loan for you.