Rates hit rock bottom as smaller lenders hit the 3's

Laine GordonMay 10, 2016( 4 min read )

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Rate update: who has moved

A total of 16 lenders have now confirmed they will be cutting their rates for Australian home owners, with some of the smaller lenders offering up never seen before rates as low as 3.35 per cent.

Aug 5, 2016( 3 min read )

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Borrowing cheaper but now more difficult

Home loan rates continue to drive lower in September with more than 220 rate cuts made in the past week, despite today’s RBA decision to leave interest rates on hold at 1.50 per cent.

Sep 6, 2016( 2 min read )

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Further rate hikes a sign of what's to come'

The Commonwealth Bank is the latest lender to lift interest rates for homebuyers looking to fix their home loan, raising rates on a number of fixed products.

Dec 3, 2016( 3 min read )

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Refinancing on the rise, as rates stall

As the RBA leaves rates on hold at 1.50 per cent today, new figures show the number of Australians refinancing their home loans is on the rise.

Nov 1, 2016( 3 min read )

May 10, 2016: Almost a quarter of all lenders have now confirmed they will be cutting their variable rates for Australian home owners, with some of the smaller lenders offering up never seen before rates as low as 3.61 per cent.

Homestar Finance has reduced its lowest variable rate to just 3.61 per cent (comparison rate of 3.65 per cent) while Reduce Home Loans’ lowest offering is now 3.65% (comparison rate of 3.66%).

Both lenders’ new rates are effective immediately for both new and existing customers.

Sally Tindall, money editor at RateCity.com.au, said that rates under 4 per cent would become increasingly more common.

“Right now there are almost 20 lenders offering rates for owner-occupiers under 4 per cent, with some reducing their lowest variables to never seen before lows,” she said.

“If the RBA decides to cut again, we’re likely to see rock-bottom home loan interest rates of under 3.5 per cent, while rates under 4 per cent will become the new norm.

“Any owner-occupier paying over the 4.5 per cent mark would have to seriously question the product they are on.”

While a number of lenders were making history with their record-busting rates, there are still around 70 lenders yet to declare their hand.

“Some lenders are still being extremely tight-lipped about whether or not they’ll pass on this cut,” she said.

“If they choose not to cut, customers deserve to know so they can decide whether they want to look for a better deal.”

To see a live list of lenders who have cut rates click here.

The Shakers:

Five of the lowest advertised ongoing variable rates

Lender	New lowest rate	Comparison Rate	Effective date
Home Star	3.61%	3.65%	5/05/2016*
Loans.com.au	3.63%	4.03%	05/05/2016*
Mortgage House	3.64%	3.64%	27/05/2016^
Reduce home loans	3.65%	3.66%	5/05/2016
Pacific Mortgage Group	3.70%	3.70%	17/05/2016

* New rates efffective now for new customers and at a later date for existing customers

^ this product requires an LVR of 30%

The Movers:

Company	Cut	Effective Date	Notes
AMP Bank	0.20%	20/05/2016
ANZ	0.19%	13/05/2016
Australian Military Bank	0.25%	27/06/2016
Auswide Bank	0.20%	25/05/2016	Investors only receive 0.15% cut
Bank of Melbourne	0.25%	23/05/2016
BankSA	0.25%	23/05/2016
BankVic	0.25%	16/05/2016
Bankwest	0.20%	20/05/2016
Bendigo Bank	0.20%	30/05/2016	Investors only receive 0.15% cut
BOQ	0.25%	18/05/2016
Coastline Credit Union	0.25%	16/05/2016
Commonwealth Bank	0.25%	20/05/2016
CUA	0.25%	19/05/2016	Investors only receive 0.20% cut
Firstmac	0.25%	23/05/2016
Greater Bank	0.25%	9/05/2016
Heritage Bank	0.20%	23/05/2016
Homestar Finance	0.25%	5/05/2016
HSBC	0.25%	23/05/2016
IMB	0.25%	25/05/2016	Investors only receive 0.20% cut
ING DIRECT	0.25%	20/05/2016
loans.com.au	0.25%	4/05/2016
Mortgage House	0.25%	6/05/2016	Start date for existing customers 27 May
NAB	0.25%	16/05/2016
Newcastle Permanent	0.25%	19/05/2016
P&N Bank	0.14%	5/05/2016
Pacific Mortgage Group	0.25%	16/05/2016
QPCU	0.25%	23/05/2016
RAMS	0.25%	23/05/2016
Reduce Home Loans	0.20%	5/05/2016
St.George Bank	0.25%	23/05/2016
Suncorp Bank	0.20%	25/05/2016	Investors only receive 0.15% cut
UBank	0.25%	16/05/2016
Westpac	0.25%	23/05/2016
Yellow Brick Road	0.25%	9/05/2016	Interest only loans from 0.10% cut
Your Credit Union	0.25%	1/06/2016

Laine Gordon

Head Of Public Relations

Laine Gordon is the Head of Public Relations at RateCity. With a background in journalism, Laine brings over a decade of experience in personal finance to the team. She is passionate about helping people get out of debt, save money, and make better decisions about their own finances.

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