Revealed: Australia’s cheapest bank loans and how YOU can save thousands of dollars a year by switching
- Financial experts Canstar said switching borrowers could save $1,320 a year
- Monthly savings of $110 possible by moving from an average loan to cheapest
- Bank of Us offers cheapest nation’s rate of 1.99 per cent but only for Tasmanians
- UK bank HSBC offers Australia’s cheapest two-year fixed rate of 2.09 per cent
- National Australia Bank subsidiary UBank has 2.14 per cent fixed rate mortgages
Australian home borrowers can save thousands of dollars a year simply by switching their home loan.
HSBC now offers Australia’s lowest fixed-rate loan of 2.09 per cent for two years.
UBank, a digital bank subsidiary of National Australia Bank, is now offering fixed one and three-year rates of 2.14 per cent.
The Bank of Us offers Australia’s lowest rate of 1.99 per cent but it is only available for existing customers or residents of Tasmania.
Australian home borrowers can save thousands of dollars a year simply by switching their home loan
Financial comparison website Canstar calculated a borrower with an average $500,000 mortgage could save $1,320 a year simply by switching to Australia’s lowest fixed rate, from an average 2.52 per cent rate.
Australia’s cheapest home loans
Bank of Us: 1.99 per cent two and three-year fixed rates (only available to existing customers and Tasmanians)
HSBC: 2.09 per cent, two-year fixed
UBank: 2.14 per for fixed one and three years
That is based on monthly savings of $110 for a borrower who has put in a 20 per cent deposit.
A year ago, Reduce Home Loan had Australia’s cheapest home loan rate of 2.89 per cent with its Low Rider Variable product.
The difference between the cheapest rate then and now would add up to $182 a month or $2,184 a year.
Canstar’s group executive of financial services Steve Mickenebecker said now was a good time to be a first-home buyer.
‘Low interest rates lower the affordability hurdle making it easier to get a loan,’ he told Daily Mail Australia.
UBank this week cut its one and three-year fixed rate loans by 0.15 percentage points taking lending rates to 2.14 per cent for owner-occupiers paying off principal and interest.
‘These are some of the sharpest home loan rates we have ever offered, and we hope they will help our customers during these uncertain times,’ UBank executive Philippa Watson said.
UBank is also waiving the $395 fee for those who settle by September 30.
HSBC now offers Australia’s lowest fixed-rate loan of 2.09 per cent for two years. Pictured is a branch in Sydney
Lenders charge exit fees for those who switch to another financial institution.
The Reserve Bank of Australia cut interest rates twice in March to a new record-low of 0.25 per cent.
The coronavirus pandemic has hit the housing market with the value of new home loans plummeting by a record 11.6 per cent in May – the worst monthly decline in Australian Bureau of Statistics records going back to 2002.
Owner-occupier loans plunged by 10.2 per cent and as investor loans plummeted by 15.6 per cent.
First-home buyers who live in their own property made up 37.4 per cent of of home loan commitments in April, a decade high, but this eased to 36.7 per cent in May.
UBank, a digital bank subsidiary of National Australia Bank, is now offering fixed one and three-year rates of 2.14 per cent. Financial comparison website Canstar calculated a borrower with an average $500,000 mortgage could save $1,320 a year simply by switching to Australia’s lowest fixed rate, from an average 2.52 per cent rate. The comparison rate is the cost after fees are factored in