Homestar Finance hits new low rate in loan market
The country’s mortgage rate war has escalated with a lender now offering the lowest two-year fixed interest rate on the market.
Homestar Finance cut its two-year owner-occupant fixed rate by 14 basis points to 1.74% as the market leader ejected Westpac from the top spot after offering the lowest rate of the big four banks last week.
RateCity’s director of research, Sally Tindall, said the increased competition was a victory for real estate lenders.
“This loan is the lowest two-year fixed rate in the market and also the lowest overall mortgage rate available nationally,” Ms. Tindall said.
“It also has one of the most competitive return rates at 2.24 percent.”
Fixed rates continued to fall after the onset of the coronavirus pandemic, which lowered the cost of debt.
Federal and state policies such as HomeBuilder, combined with lower rates, are fueling significant home purchase demand.
The drop in mortgage rates comes despite the fact that the Reserve Bank has not changed the official cash rate since November. The central bank has pledged to keep the rate at 0.1% while inflation is below its target range.
According to RateCity, a Homestar rate mortgage owner with a loan balance of $ 400,000 would pay $ 2,832 less interest than the market’s two-year average fixed rate.
Over the past two months, 450 fixed rates have been reduced in the mortgage market.
Ms Tindall said the country’s largest lender, the Commonwealth Bank, had yet to change rates this year.
“CBA is the only major bank not to cut fixed mortgage rates this year. ” she said.
“The pressure is now on Australia’s largest bank to rethink rates or risk losing customers to others.”
Homestar’s low rate has a loan-to-value ratio (LVR) of 80 percent, which means that a 20 percent equity deposit is required to acquire the loan without the need to acquire mortgage insurance from the lenders. .
Small lender is also tied first for lowest variable rate with Reducing Home Loans to 1.79%
The Greater Bank has the lowest rate in the market with its one-year fixed rate of 1.69%, but is only available to customers in New South Wales, Queensland and the Capital Territory Australian.
NAB’s digital affiliate, UBank, offers the lowest three-year fixed rate at 1.75%, while the Westpac Group has the lowest four-year fixed rate at 1.89%.