New record-low home loan interest rate of below 2% targeted at refinancers

Could your budget stand to gain from a better home loan interest rate? An online-only lender is now in the lead in the rate race.
Easy Street Financial Services home loan cut to 1.95 6.08.20
Could your budget stand to gain from a lower home loan interest rate? Image source: pada smith, Shutterstock.

It seems to be nearly every week we’re announcing a new record-low home loan rate, evidence of the fierce competition in the mortgage interest rate market at the moment.

And the race for the lowest rates arguably couldn’t come at a more essential time for the many Australians who are experiencing a high degree of uncertainty about money in the midst of a pandemic and may be looking at how to future-proof their finances with a better interest rate.

Easy Street Financial Services – a bank with no physical branches which is a division of Sydney-based Community First Credit Union – has announced an ongoing variable interest rate offer of 1.95% (comparison rate 1.99%), available for a limited time.

This would be the lowest rate on Canstar’s home loan database at the time of writing, beating the next-best variable rate from Loans.com.au of 1.99% (comparison rate 2.56%) which is only available for a one-year introductory period.

Easy Street’s record-low-rate offer is available to new owner-occupier customers paying principal and interest with a deposit of at least 20%, on loans of more than $750,000.

Applications opened on 4 August and loans need to be settled by 31 October to be eligible for the new rate, though Easy Street’s terms and conditions state it can withdraw the offer at any time.

That doesn’t leave much time for prospective borrowers to find a property and go through the loan application process.

Canstar finance expert Steve Mickenbecker said Easy Street could be going after a certain type of borrower with this limited time offer.

“Given the very short availability period for this 1.95% rate, it looks to be more targeted at the refinance market than new purchases,” Mr Mickenbecker said.

Canstar analysis reveals that if a hypothetical borrower switched from the average rate on our database to Easy Street’s rate, it could save them more than $650 a month in mortgage repayments and over $234,000 in interest on a $800,000 loan paid off in principal and interest payments over 30 years, assuming interest rates remained the same.

Easy Street also announced some reductions from 4 August to its standard variable rates for new customers paying principal and interest and interest only, with the owner-occupier rates reduced by 0.06 percentage points and the investor rates by 0.46 percentage points down to 2.59% (comparison rates 2.63%).

Existing customers have missed out on rate relief this round, however, with the lender’s standard variable rates remaining unchanged.

Want a fixed rate instead? More options below 2%

Easy Street’s parent company, Community First Credit Union, also made home loan rate changes today that saw it introduce both a fixed rate and a variable rate starting with a ‘1’.

Its two-year fixed and two-year introductory variable Accelerator package home loan rates have both had a rate cut of 0.30 percentage points, taking them down to 1.99% (comparison rate 3.25% for both products).

The big difference between the loans’ advertised and comparison rates may cause confusion, but is likely at least partially due to them having quite a large annual fee of $395, though the application and legal fees are waived. Package loans also tend to have more features than standard loans.

The Community First offers are available to apply for from 4 August with funding required by 31 October, and are only available to new customers with a minimum balance of $100,000, or existing customers with loan increases of at least $50,000. A deposit of at least 20% is necessary.

At the end of the two-year fixed period, the interest rate will revert to 2.99% (with comparison rates remaining at 3.25%) rather than the standard package variable rate of 3.74% (comparison rate 4.15%).

→ Looking for a better deal? Here’s how to switch home loans

> Looking to find a better deal? Compare car insurancecar loanshealth insurancecredit cards as well as home loans, with Canstar.


This article was reviewed by our Sub-editor Tom Letts before it was published as part of our fact-checking process.

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