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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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.

How long does Bankwest take to approve home loans?

Full approval for a home loan usually involves a property valuation, which, Bankwest suggests, can take “a week or two”. As a result, getting your home loan approved may take longer. However, you may get full approval within this time if you applied for and received conditional approval, sometimes called a pre-approval, from Bankwest before finalising the home you want to buy.  

Another way of speeding up approvals can be by completing, signing, and submitting your home loan application digitally. Essentially, you give the bank or your mortgage broker a copy of your home’s sale contract and then complete the rest of the steps online. Bankwest has claimed this cuts the approval time to less than four days, although this may only happen if your income and credit history can be verified easily, or if your home’s valuation doesn’t take time.

Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

Can I apply for an ANZ non-resident home loan? 

You may be eligible to apply for an ANZ non-resident home loan only if you meet the following two conditions:

  1. You hold a Temporary Skill Shortage (TSS) visa or its predecessor, the Temporary Skilled Work (subclass 457) visa.
  2. Your job is included in the Australian government’s Medium and Long Term Strategic Skills List. 

However, non-resident home loan applications may need Foreign Investment Review Board (FIRB) approval in addition to meeting ANZ’s Mortgage Credit Requirements. Also, they may not be eligible for loans that require paying for Lender’s Mortgage Insurance (LMI). As a result, you may not be able to borrow more than 80 per cent of your home’s value. However, you can apply as a co-borrower with your spouse if they are a citizen of either Australia or New Zealand, or are a permanent resident.

How can I get ANZ home loan pre-approval?

Shopping for a new home is an exciting experience and getting a pre-approval on the loan may give you the peace of mind that you are looking at properties within your budget. 

At the time of applying for the ANZ Bank home loan pre-approval, you will be required to provide proof of employment and income, along with records of your savings and debts.

An ANZ home loan pre-approval time frame is usually up to three months. However, being pre-approved doesn’t necessarily mean you will get your home loan. Other factors could lead to your home loan application being rejected, even with a prior pre-approval. Some factors include the property evaluation not meeting the bank’s criteria or a change in your financial circumstances.

You can make an application for ANZ home loan pre-approval online or call on 1800100641 Mon-Fri 8.00 am to 8.00 pm (AEST).

Can I get a NAB home loan on casual employment?

While many lenders consider casual employees as high-risk borrowers because of their fluctuating incomes, there are a few specialist lenders, such as NAB, which may provide home loans to individuals employed on a casual basis. A NAB home loan for casual employment is essentially a low doc home loan specifically designed to help casually employed individuals who may be unable to provide standard financial documents. However, since such loans are deemed high risk compared to regular home loans, you could be charged higher rates and receive lower maximum LVRs (Loan to Value Ratio, which is the loan amount you can borrow against the value of the property).

While applying for a home loan as a casual employee, you will likely be asked to demonstrate that you've been working steadily and might need to provide group certificates for the last two years. It is at the lender’s discretion to pick either of the two group certificates and consider that to be your income. If you’ve not had the same job for several years, providing proof of income could be a bit of a challenge for you. In this scenario, some lenders may rely on your year to date (YTD) income, and instead calculate your yearly income from that.

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.

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.