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Home loan rate roundup: Heritage & UBank drops rates by up to 30 basis points

Home loan rate movements were dominated by decreases last week, with seven institutions making cuts to their home loan products by up to 30 basis points.

Heritage UBank rate cuts

 

While several lenders rose rates at the end of March, last week saw not a single rise among lenders, with UBank & Heritage Bank setting the standard with rate cuts by 10-30 basis points.

UBank cut rates on its fixed rate principal & interest and interest-only home loans. In particular:

  • Its Fixed IO and P&I 3-year UHomeLoans fell by 25 basis points
  • Its Fixed IO and P&I 5-year UHomeLoans fell by 30 basis points

UBank also cut its Fixed 3-year Investment UHomeLoan by 15-basis points.

“Ubank has been the biggest mover on home loan interest rates in the past week reducing the interest rate on their fixed home loans by up to 30 basis points,” said Mitch Watson, Group Manager of Research and Ratings at Canstar.

“These rate movements are very competitive in the market and they are now equal with the market leading rates on offer from Greater Bank and Newcastle Permanent on a 3-year fixed term.”

In news this week, Heritage Bank pushed for a larger slice of the investor home lending market by cutting interest rates across its variable investment product range.

This round of rate cuts follows Heritage Bank’s cuts to its variable owner-occupier rates last month.

CEO Peter Lock said Heritage now offers a Home Advantage Variable rate as low as 4.09% (4.49%* comparison rate) for borrowers of more than $700,000.

“Heritage prides itself on offering home loan rates that are among the sharpest in the market, and these cuts will help us maintain that position,” Mr Lock said.

“At a time when we’ve seen some other lenders lifting their rates in recent weeks, we’re going in the opposite direction and making our home loans even more attractive for prospective borrowers across the country.”

Heritage Bank’s variable investment home loan rates

Rates based on investment home loans available for a loan amount of $350,000 at 80% LVR (Principal & Interest). Table sorted by current rate.

UBank’s fixed home loan rates

Rates based on residential home loans available for a loan amount of $350,000 at 80% LVR (Principal & Interest). Table sorted by current rate.

Greater Bank decreases rates for investors

Greater Bank was another institution to lower fixed home loan rates – this time for investors. In total, Canstar has found 10 Greater Bank investment home loan products that have had their interest rates slashed.

The customer-owned bank reduced interest rates on their Great Rate and Ultimate fixed rate products by 10 basis points on terms from 1 year to 5 years.

Rates based on investment home loans available for a loan amount of $350,000 at 80% LVR (Principal & Interest). Table sorted by current rate.

Fixed, investment home loans the flavour of the week

Greater Bank and UBank weren’t the only lenders to join the growing group of institutions to cut their investment rates – Aussie, Bankwest and ING also lowered rates on variable investment products.

Mr Watson said the year has definitely started with big movements to fixed rate loans.

“With the outlook for the cash rate to stay steady or increase in the future, lenders may be jockeying for early movers looking to lock in their home loan interest rate,” he said,

The table below summarises each of last week’s home loan rate changes.

Home Loan Product Level Changes (03/04/2018 to 09/04/2018)

Company Product  Old Rate New Rate Change(%)

Comparison Rate*

Owner Occupier Home Loans
Variable
Aussie Select Basic Variable PI 100-499k 80% 3.79 3.69 -0.1 3.7
Aussie Select Standard Variable PI 100-499k 80% 3.79 3.69 -0.1 3.89
Macquarie Credit Union Power Home Loan Package Power 400k+ 3.79 4.09 0.3 4.52
RACQ Bank Mortgage Saver 3.74 3.62 -0.12 3.62
Fixed
UBank UHomeLoan Fixed IO 1 yr 3.69 3.59 -0.1 4.07
UBank UHomeLoan Fixed IO 3 yrs 3.99 3.74 -0.25 4.01
UBank UHomeLoan Fixed IO 5 yrs 4.39 4.09 -0.3 4.1
UBank UHomeLoan Fixed PI 1 yr 3.69 3.59 -0.1 4.07
UBank UHomeLoan Fixed PI 3 yrs 3.99 3.74 -0.25 4.01
UBank UHomeLoan Fixed PI 5 yrs 4.39 4.09 -0.3 4.1
Investor Home Loans
Variable
Aussie Inv Select Basic Variable PI 100-499k 80% 4.29 4.19 -0.1 4.2
Aussie Inv Select Standard Variable PI 100-499k 80% 4.29 4.19 -0.1 4.38
Bankwest Complete Home Loan Variable Investment 80% 200k+ 4.59 4.44 -0.15 4.84
ING Inv Mortgage Simplifier IO 150-499k 4.69 4.59 -0.1 4.63
ING Inv Orange Advantage Variable IO 150-499k 4.64 4.54 -0.1 4.83
Fixed
Greater Bank Great Rate Investment Fixed P&I 1 yr 4.34 4.24 -0.1 4.6
Greater Bank Great Rate Investment Fixed P&I 2 yrs 4.39 4.29 -0.1 4.58
Greater Bank Great Rate Investment Fixed P&I 3 yrs 4.39 4.29 -0.1 4.55
Greater Bank Great Rate Investment Fixed P&I 4 yrs 4.64 4.54 -0.1 4.61
Greater Bank Great Rate Investment Fixed P&I 5 yrs 4.64 4.54 -0.1 4.6
Greater Bank Ultimate Investment Fixed 1 yr 150k+ 4.19 4.09 -0.1 4.76
Greater Bank Ultimate Investment Fixed 2 yrs 150k+ 4.19 4.09 -0.1 4.73
Greater Bank Ultimate Investment Fixed 3 yrs 150k+ 4.24 4.14 -0.1 4.72
Greater Bank Ultimate Investment Fixed 4 yrs 150k+ 4.45 4.35 -0.1 4.77
Greater Bank Ultimate Investment Fixed 5 yrs 150k+ 4.49 4.39 -0.1 4.78
UBank Inv UHomeLoan Fixed 3 yrs 4.14 3.99 -0.15 4.43
Rates based on loans available for $400,000 at 80%LVR. *Comparison rate based on a loan amount of $150,000 over 25 years.

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