Aussie borrowers have been watching lenders battle it out by cutting interest rates since the last cash rate cut in November 2020. But we may be nearing the end of rock-bottom interest rates as more lenders have started lifting fixed rates in recent weeks.
At the start of June, the last 4-year fixed home loan rate below 2 per cent was hiked, bringing an end to the era of ultra-low long-term fixed rates in Australia. Comparatively, there were 32 4-year fixed rates below 2 per cent in January this year.
Big four bank, Westpac, also lifted its 2- and 3-year fixed rate home loans only yesterday. Commonwealth Bank hiked its 3-year rate last month, and since then 9 other lenders have increased 3-year fixed rates.
This means that borrowers hoping to nab a competitive home loan offer may need to look to other benefits, such as cashback deals, to get the biggest bang for their buck.
Aussie lenders are offering competitive cashback deals, with sign-up offers up to $5,000 on the table (loan amount dependent). Lenders are also offering competitive bonus credit card rewards and reduced Lender’s Mortgage Insurance to encourage borrowers to join with them.
Let’s explore some of the home loan deals on offer for June 2021.
What deals are on offer this month?
- Cashback deals
Cashback deals can range between $1,000 - $5,000, depending on the lender, and may be offered in the form of a direct deposit into your bank account, as gift cards or may be subtracted from the loan balance or loan application fees. Cashback deals may help borrowers pay for the cost of refinancing, pay off upfront fees or even go towards an appliance for the new home.
In June, we’ve seen more lenders offer cashback deals for first home buyers compared to just one last month. Of the 24 lenders offering cashback deals, 5 are available to first home buyers. Recently, cashback deals have mainly been offered to refinancers as part of the home loan war to entice new customers to switch to said lender.
Interestingly, Australian Military Bank is offering up to $1,000 for investors only, and Police Bank is offering $1,500 - $2,000 for owner-occupier refinancers only.
- Reduced LMI
Lenders Mortgage Insurance (LMI) can climb into the tens of thousands of dollars range, depending on the value of your home loan, unless you have a Loan-to-Value Ratio (LVR) of 80 or less. Meaning, first home buyers with a deposit under 20 per cent will need to pay this costly insurance. And for some properties (particularly in capital cities), a deposit of this size is very difficult to achieve.
St. George is offering to help customers by offering a reduced LMI deal. The offer is available to eligible first home buyers with a 15 per cent deposit, looking for an owner-occupier home loan, and planning on making principal and interest repayments.
According to St. George, the eligibility requirements include:
- "Be a first home buyer applying for your first home loan for your first property
- Apply for a home loan with St. George from Monday 13 July 2020
- Your home loan has an LVR up to 85 per cent at the time of formal approval
- Loan size must not be over $850,000
- For joint applications, only one applicant needs to be a first home buyer
- Only one property financed per application.”
- Qantas frequent flyer points
You may be able to earn bonus Qantas frequent flyer points when you sign up for a home loan.
Macquarie Bank and Qudos Bank currently offer a home loan sign-up deal that rewards borrowers with Qantas Points. These points may be available at the time of approval or released over your loan term.
Plus, you won’t need to spend on eligible purchases to earn these reward points bonuses.
|Lender||Qantas Frequent flyer (QFF) points bonus||Interest rate||Comparison rate||Offer|
|Macquarie Bank Basic Flyer Home Loan||Up to 170,000 QFF points when you borrow $600k||2.39%||2.39%||10k QFF points for every $100k loan drawn, 1000 QFF points per month for the life of the loan, 25,000 QFF points on the third and fifth anniversary of your loan.|
|Qudos Bank Qantas Points Home Loan||150 QFF for every $1000 of loan balance, no minimum loan balance.||2.79%||2.79%||Earn 150 Qantas Points for every $1,000 on your loan balance p.a., credited monthly. No minimum loan balance – earn points for the life of your loan.|
Source: RateCity.com.au. Data accurate as of 09/06/2021.
- Keep in mind that there is more to a home loan than a deal being offered to you, and it’s always important to compare the interest rates, fees and features of a loan before applying. For more information on whether one of the above loans may suit your finances, consider using our Home Loan Calculator to see how potential repayments could fit in your budget.