Cash Back Hero Variable (Principal and Interest) (LVR < 80%)

Real Time Rating™

3.80

/ 5

Cashback

Get between $1,000 to $10,000 as cashback on loans above $250,000. Available for new loans and refinancing.

RateCity Says: The larger your home loan, the more you may be able to claim in cashback. Plus, this variable rate loan charges no upfront or ongoing fees.

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Advertised Rate

2.59%

Variable

Comparison Rate*

2.59%

Maximum LVR
80%
Real Time Rating™

3.80

/ 5
Monthly Repayment

$4,282

based on $945,000 loan amount for 25 years

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Calculate repayment for Reduce Home Loans product

Advertised Rate

2.59%

Variable

Comparison Rate*

2.59%

Maximum LVR
80%
Real Time Rating™

3.80

/ 5

I'd like to borrow

$

Loan term

years

Your estimated repayment

$4,282

based on $945,000 loan amount for 25 years

Pros and Cons

Pros and Cons

  • No upfront or ongoing fees
  • Parents can sign as guarantor
  • Extra repayments and redraw facility
  • Free redraw facility
  • No offset account
  • Discharge fee at end of loan
  • No repayment holidays

Reduce Home Loans Features and Fees

Reduce Home Loans Features and Fees

Details

Maximum LVR
80%
Total Repayments
Next LVR
Interest rate type
Variable
Borrowing range
Suitable for
Owner Occupiers
Loan term range
1 - 30 years
Principal & interest
Interest only
Applicable states
ACT, NSW, NT, QLD, SA, TAS, VIC, WA
Make repayments
Fortnightly, Monthly, Weekly

Features

Extra repayments
Unlimited extra repayments
Redraw facility

Redraw fee: $0

Split interest facility
Loan portable

Repayment holiday available

Allow guarantors

Available for first home buyers

Fees

Total estimated upfront fees
$0
Application fee
$0
Valuation fee
At Cost
Settlement fee
$0
Other upfront fee
$0
Ongoing fee
$0
Discharge fee
$500

Application method

Online
Phone

Broker
In branch

Specials
  • Cashback Get between $1,000 to $10,000 as cashback on loans above $250,000. Available for new loans and refinancing.
    $2,000 cashback for loans < $1 mn. $4,000 cashback for loans < $2 mn. $6,000 cashback for loans < $3 mn. $8,000 cashback for loans < $4 mn. $10,000 cashback for loans > $4 mn. Min loan amount of $250,000 to receive cashback offer.

Other Benefits

100% offset account available at $10 per month. 0.08% discount on rate after 60 months.

Pros and Cons

  • No upfront or ongoing fees
  • Parents can sign as guarantor
  • Extra repayments and redraw facility
  • Free redraw facility
  • No offset account
  • Discharge fee at end of loan
  • No repayment holidays

Reduce Home Loans Features and Fees

Details

Maximum LVR
80%
Total Repayments
Next LVR
Interest rate type
Variable
Borrowing range
Suitable for
Owner Occupiers
Loan term range
1 - 30 years
Principal & interest
Interest only
Applicable states
ACT, NSW, NT, QLD, SA, TAS, VIC, WA
Make repayments
Fortnightly, Monthly, Weekly

Features

Extra repayments
Unlimited extra repayments
Redraw facility

Redraw fee: $0

Split interest facility
Loan portable

Repayment holiday available

Allow guarantors

Available for first home buyers

Fees

Total estimated upfront fees
$0
Application fee
$0
Valuation fee
At Cost
Settlement fee
$0
Other upfront fee
$0
Ongoing fee
$0
Discharge fee
$500

Application method

Online
Phone

Broker
In branch

Specials
  • Cashback Get between $1,000 to $10,000 as cashback on loans above $250,000. Available for new loans and refinancing.
    $2,000 cashback for loans < $1 mn. $4,000 cashback for loans < $2 mn. $6,000 cashback for loans < $3 mn. $8,000 cashback for loans < $4 mn. $10,000 cashback for loans > $4 mn. Min loan amount of $250,000 to receive cashback offer.

Other Benefits

100% offset account available at $10 per month. 0.08% discount on rate after 60 months.

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FAQs

When should I switch home loans?

The answer to this question is dependent on your personal circumstances – there is no best time for refinancing that will apply to everyone.

If you want a lower interest rate but are happy with the other aspects of your loan it may be worth calling your lender to see if you can negotiate a better deal. If you have some equity up your sleeve – at least 20 per cent – and have done your homework to see what other lenders are offering new customers, pick up the phone to your bank and negotiate. If they aren’t prepared to offer you lower rate or fees, then you’ve already done the research, so consider switching.

How do guaranteed home loans work?

A guaranteed home loan involves a guarantor (often a parent) promising to pay off a mortgage if the principal borrower (often the child) fails to do so. The guarantor will also have to provide security, which is often the family home.

The principal borrower will usually be someone struggling to find the money to enter the property market. By partnering with a guarantor, the borrower increases their financial power and becomes less of a risk in the eyes of lenders. As a result, the borrower may:

  • Qualify for a mortgage that they would have otherwise been denied
  • Not be required to pay lender’s mortgage insurance (LMI)
  • Be charged a lower interest rate
  • Be charged less in fees

Does Australia have no-deposit home loans?

Australia no longer has no-deposit home loans – or 100 per cent home loans as they’re also known – because they’re regarded as too risky.

However, some lenders allow some borrowers to take out mortgages with a 5 per cent deposit.

Another option is to source a deposit from elsewhere – either by using a parental guarantee or by drawing out equity from another property.

What are the pros and cons of no-deposit home loans?

It’s no longer possible to get a no-deposit home loan in Australia. In some circumstances, you might be able to take out a mortgage with a 5 per cent deposit – but before you do so, it’s important to weigh up the pros and cons.

The big advantage of borrowing 95 per cent (also known as a 95 per cent home loan) is that you get to buy your property sooner. That may be particularly important if you plan to purchase in a rising market, where prices are increasing faster than you can accumulate savings.

But 95 per cent home loans also have disadvantages. First, the 95 per cent home loan market is relatively small, so you’ll have fewer options to choose from. Second, you’ll probably have to pay LMI (lender’s mortgage insurance). Third, you’ll probably be charged a higher interest rate. Fourth, the more you borrow, the more you’ll ultimately have to pay in interest. Fifth, if your property declines in value, your mortgage might end up being worth more than your home.

How common are low-deposit home loans?

Low-deposit home loans aren’t as common as they once were, because they’re regarded as relatively risky and the banking regulator (APRA) is trying to reduce risk from the mortgage market.

However, if you do your research, you’ll find there is still a fairly wide selection of banks, credit unions and non-bank lenders that offers low-deposit home loans.

Are bad credit home loans dangerous?

Bad credit home loans can be dangerous if the borrower signs up for a loan they’ll struggle to repay. This might occur if the borrower takes out a mortgage at the limit of their financial capacity, especially if they have some combination of a low income, an insecure job and poor savings habits.

Bad credit home loans can also be dangerous if the borrower buys a home in a stagnant or falling market – because if the home has to be sold, they might be left with ‘negative equity’ (where the home is worth less than the mortgage).

That said, bad credit home loans can work out well if the borrower is able to repay the mortgage – for example, if they borrow conservatively, have a decent income, a secure job and good savings habits. Another good sign is if the borrower buys a property in a market that is likely to rise over the long term.

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.

Do the big four banks have guarantor home loans?

Yes, ANZ, Commonwealth Bank, NAB and Westpac all offer guarantor home loans. These mortgages are also offered by many other banks, credit unions and building societies.

How can I calculate interest on my home loan?

You can calculate the total interest you will pay over the life of your loan by using a mortgage calculator. The calculator will estimate your repayments based on the amount you want to borrow, the interest rate, the length of your loan, whether you are an owner-occupier or an investor and whether you plan to pay ‘principal and interest’ or ‘interest-only’.

If you are buying a new home, the calculator will also help you work out how much you’ll need to pay in stamp duty and other related costs.

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 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 a guarantor?

A guarantor is someone who provides a legally binding promise that they will pay off a mortgage if the principal borrower fails to do so.

Often, guarantors are parents in a solid financial position, while the principal borrower is a child in a weaker financial position who is struggling to enter the property market.

Lenders usually regard borrowers as less risky when they have a guarantor – and therefore may charge lower interest rates or even approve mortgages they would have otherwise rejected.

However, if the borrower falls behind on their repayments, the lender might chase the guarantor for payment. In some circumstances, the lender might even seize and sell the guarantor’s property to recoup their money.

How do I take out a low-deposit home loan?

If you want to take out a low-deposit home loan, it might be a good idea to consult a mortgage broker who can give you professional financial advice and organise the mortgage for you.

Another way to take out a low-deposit home loan is to do your own research with a comparison website like RateCity. Once you’ve identified your preferred mortgage, you can apply through RateCity or go direct to the lender.

What is breach of contract?

A failure to follow all or part of a contract or breaking the conditions of a contract without any legal excuse. A breach of contract can be material, minor, actual or anticipatory, depending on the severity of the breaches and their material impact.

What happens when you default on your mortgage?

A mortgage default occurs when you are 90 days or more behind on your mortgage repayments. Late repayments will often incur a late fee on top of the amount owed which will continue to gather interest along with the remaining principal amount.

If you do default on a mortgage repayment you should try and catch up in next month’s payment. If this isn’t possible, and missing payments is going to become a regular issue, you need to contact your lender as soon as possible to organise an alternative payment schedule and discuss further options.

You may also want to talk to a financial counsellor. 

How often is your data updated?

We work closely with lenders to get updates as quick as possible, with updates made the same day wherever possible.

Mortgage Calculator, Repayment Type

Will you pay off the amount you borrowed + interest or just the interest for a period?

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.

Why was Real Time Ratings developed?

Real Time RatingsTM was developed to save people time and money. A home loan is one of the biggest financial decisions you will ever make – and one of the most complicated. Real Time RatingsTM is designed to help you find the right loan. Until now, there has been no place borrowers can benchmark the latest rates and offers when they hit the market. Rates change all the time now and new offers hit the market almost daily, we saw the need for a way to compare these new deals against the rest of the market and make a more informed decision.

What is a debt service ratio?

A method of gauging a borrower’s home loan serviceability (ability to afford home loan repayments), the debt service ratio (DSR) is the fraction of an applicant’s income that will need to go towards paying back a loan. The DSR is typically expressed as a percentage, and lenders may decline loans to borrowers with too high a DSR (often over 30 per cent).