How low can interest rates go in Australia? Since Tuesday’s cash rate cut, to a new record low of 0.75%, customers can now find more home loans with an advertised interest rate below 3% on variable or fixed rate terms from more than 40 lenders on our database.
Typically, banks use the cash rate as a guide to set interest rates on products such as home loans. Canstar’s database shows variable interest rates on home loans have been slowly falling since the RBA brought the official cash rate down to 1% in July, after having cut it for the first time in three years in June.
Fixed rates have also come down in the past few months, reflecting the lower prices banks have been paying for long-term wholesale funding.
Consumers will now be watching closely to see which financial institutions will pass on the benefits of the most recent cash rate cut.
Immediately after the RBA announcement this week, Athena and Homestar said they would pass on the full 0.25 percentage point cut to customers, shortly followed by Reduce Home Loans which now offers the lowest variable rate for owner occupiers paying principal and interest, at 2.69% (comparison rate 2.71%).
As for the majors, Commonwealth Bank, National Australia Bank, Westpac and ANZ have announced they will partially reduce variable home loan rates.
CBA was the first of the big four banks to offer fixed rates below 3%, reducing its two and three-year package fixed rates to 2.99% (comparison rate to be advised) for new and existing customers from 3 October. ANZ said it would also cut its equivalent rates on the same date to 2.98% (comparison rate to be advised).
With a mix of factors impacting current home loan interest rates, we take a look at where customers could find a home loan with an advertised rate below 3%.
Which banks have home loan interest rates below 3%?
Lenders currently offering the cheapest home loans with rates below 3% include the following, listed alphabetically:
- Adelaide Bank
- AMO Group
- ANZ
- Athena
- Aussie
- Bank Australia
- Bank First
- Bank of Melbourne
- BankSA
- Bankwest
- Bendigo Bank
- BOQ
- Citi
- Commonwealth Bank
- CUA
- Firefighters Mutual Bank
- Freedom Lend
- G&C Mutual Bank
- Greater Bank
- Health Professionals Bank
- Heritage Bank
- Homestar Finance
- Hume Bank
- IMB
- Mortgage House
- MOVE Bank
- Newcastle Permanent
- Northern Inland CU
- Pacific Mortgage Group
- People’s Choice Credit Union
- QBANK
- Queensland Country Credit Union
- Queenslanders CU
- RACQ Bank
- RAMS
- Reduce Home Loans
- RESI Mortgage Corp
- St. George Bank
- Summerland Credit Union
- Suncorp Bank
- Teachers Mutual Bank
- TicToc Home Loans
- UBank
- UniBank
- Yellow Brick Road
Rates starting with a “2” are overwhelmingly available on fixed rate loans, with Canstar’s home loan database currently showing only 11 variable rate options, compared to a total of 133 across fixed terms spanning over one, two, three, four and five years.
Here is the complete list of the home loans on our database with advertised interest rates below 3% (current as at 10am on Friday, 4 October, 2019). Bear in mind that some of these rates may only be available to borrowers who meet certain criteria, such as a minimum loan amount or a maximum loan to value ratio (LVR), so it could be worth checking what conditions may apply.
Variable home loan interest rates below 3%
| Variable Home Loans Below 3% | ||||
| Lender | Loan | Rate | Comparison Rate* | |
| Reduce Home Loans | Low Rider Variable 80% | 2.69% | 2.71% | |
| Homestar Finance | Star Essentials 80% OO 150-850k | 2.74% | 2.77% | |
| Freedom Lend | Freedom Variable/Freedom Variable Special PI 80% | 2.79% | 2.79% | |
| G&C Mutual Bank | First Home Premium Package Variable P&I | 2.79% | 2.79% | |
| Homestar Finance | Star Classic Owner Occupied P&I Variable 150-850k 80% | 2.79% | 2.82% | |
| Athena | Owner Occupied P&I Refinance only | 2.84% | 2.80% | |
| Pacific Mortgage Group | Variable P&I | 2.99% | 2.99% | |
| TicToc Home Loans | Live-in Variable P&I | 2.99% | 3.00% | |
| TicToc Home Loans | Low Deposit Variable P&I | 2.99% | 3.00% | |
| Reduce Home Loans | Investor Rate Slasher 80% | 2.99% | 3.02% | |
| Source: www.canstar.com.au – 4/10/2019. Based on variable loans for a loan amount of $400,000 and 80% in Canstar’s Home Loans Database. *Comparison rate represents interest rate and fee costs combined into a single percentage figure, based on a loan amount of $150,000 and a loan term of 25 years. Table sorted lowest to highest by interest rate, followed by comparison rate; and then alphabetically by lender. | ||||
1-year fixed home loan interest rates below 3%
| 1 Year Fixed Home Loans Below 3% | ||||
| Lender | Loan | Rate | Comparison Rate* | |
| Greater Bank | Great Rate/Great Rate Discount Fixed 1 yr $150k+ | 2.79% | 3.95% | |
| Greater Bank | Ultimate/Ultimate Discount Fixed 1 yr 150k+ | 2.79% | 4.16% | |
| Greater Bank | Standard Fixed 1 yr | 2.79% | 4.18% | |
| Greater Bank | Great Rate/Great Rate Discount Fixed IO 1 yr $150k+ | 2.89% | 3.95% | |
| Greater Bank | Ultimate/Ultimate Discount Fixed IO 1 yr 150k+ | 2.89% | 4.16% | |
| Greater Bank | Standard Fixed IO 1 yr | 2.89% | 4.19% | |
| QBANK | Residential Fixed <95% LVR 1 yr | 2.94% | 4.08% | |
| Firefighters Mutual Bank | Fixed Rate 1 yr | 2.98% | 4.62% | |
| Health Professionals Bank | Standard Fixed P&I 1 yr | 2.98% | 4.62% | |
| Teachers Mutual Bank | Fixed Rate 1 yr | 2.98% | 4.62% | |
| UniBank | Fixed Rate 1 yr | 2.98% | 4.62% | |
| TicToc Home Loans | Live-in Fixed P&I 1 yr | 2.99% | 3.09% | |
| Adelaide Bank | SmartSaver Fixed P&I 1 yr | 2.99% | 3.30% | |
| Adelaide Bank | SmartFix P&I 1 yr | 2.99% | 3.49% | |
| Citi | Mortgage Plus Standard Fixed P&I 1 yr 400k+ | 2.99% | 3.57% | |
| IMB | Residential Fixed P&I 1 yr 90% | 2.99% | 3.60% | |
| UBank | UHomeLoan Fixed PI 1 yr | 2.99% | 3.63% | |
| Queensland Country Credit Union | 1 Year Fixed Rate Package Owner Occupier/Investor Loan P&I Special Offer | 2.99% | 3.94% | |
| Queenslanders CU | 1 Year Fixed Rate Package Owner Occupier/Investor Loan P&I Special Offer | 2.99% | 3.94% | |
| Bank of Melbourne | Advantage Package Residential Fixed P&I 1 yr 60-80% 150k+ | 2.99% | 3.95% | |
| St.George Bank | Advantage Package Residential Fixed P&I 1 yr 60-80% | 2.99% | 3.95% | |
| BankSA | Advantage Package Residential Fixed P&I 1 yr 150k+ | 2.99% | 4.00% | |
| Northern Inland CU | Introductory Home Loan P&I Fixed 1 yr | 2.99% | 4.16% | |
| People’s Choice Credit Union | Home Loan Package Residential Fixed P&I 1 yr 100k+ | 2.99% | 4.34% | |
| Summerland Credit Union | Standard Fixed 1 yr | 2.99% | 4.82% | |
| Citi | Standard Fixed P&I 1 yr 400k+ | 2.99% | 5.39% | |
| Source: www.canstar.com.au – 4/10/2019. Based on 1-year fixed loans for a loan amount of $400,000 and 80% LVR in Canstar’s Home Loans Database. *Comparison rate represents interest rate and fee costs combined into a single percentage figure, based on a loan amount of $150,000 and a loan term of 25 years. Table sorted lowest to highest by interest rate, followed by comparison rate; and then alphabetically by lender. | ||||
2-year fixed home loan interest rates below 3%
| 2 Year Fixed Home Loans Below 3% | ||||
| Lender | Loan | Rate | Comparison Rate* | |
| Reduce Home Loans | Home Owners Dream 2 Yrs Fixed | 2.79% | 3.06% | |
| AMO Group | Residential Fixed 2 yrs | 2.89% | 3.39% | |
| RACQ Bank | Choices Residential Fixed 2 yrs 20k+ | 2.90% | 4.40% | |
| Pacific Mortgage Group | Residential Fixed P&I 2 yrs | 2.94% | 2.99% | |
| Hume Bank | 2 Year Fixed Intro Package P&I | 2.98% | 4.25% | |
| Hume Bank | First Home Starters Package 2 year Intro 150k+ | 2.98% | 4.25% | |
| Firefighters Mutual Bank | Fixed Rate 2 yr | 2.98% | 4.47% | |
| Health Professionals Bank | Standard Fixed P&I 2 yrs | 2.98% | 4.47% | |
| Teachers Mutual Bank | Fixed Rate 2 yrs | 2.98% | 4.47% | |
| UniBank | Fixed Rate 2 yrs | 2.98% | 4.47% | |
| ANZ | Breakfree Residential Fixed 2 yrs 150k+ | 2.98% | 4.57% | |
| TicToc Home Loans | Live-in Fixed P&I 2 yrs | 2.99% | 3.08% | |
| Adelaide Bank | SmartSaver Fixed P&I 2 yrs | 2.99% | 3.28% | |
| Aussie | Select Basic Fixed PI 2 yrs 80% | 2.99% | 3.38% | |
| Adelaide Bank | SmartFix P&I 2 yrs | 2.99% | 3.46% | |
| Bendigo Bank | Basic Fixed Owner Occupied PI 2 yrs | 2.99% | 3.51% | |
| Mortgage House | Advantage Fixed P&I 2 yrs | 2.99% | 3.54% | |
| IMB | Residential Fixed P&I 2 yrs 90% | 2.99% | 3.55% | |
| Citi | Mortgage Plus Standard Fixed P&I 2 yrs 400k+ | 2.99% | 3.56% | |
| RESI Mortgage Corp | Flexi Options Fixed P&I 2 yrs Special Offer | 2.99% | 3.59% | |
| Yellow Brick Road | Flexi Options Fixed P&I 2 yrs Special Offer | 2.99% | 3.59% | |
| Bank Australia | Residential Premium Package 70-90% 2 yrs | 2.99% | 3.75% | |
| Greater Bank | Great Rate/Great Rate Discount Fixed 2 yrs $150k+ | 2.99% | 3.87% | |
| Aussie | Select Standard Fixed PI 2 yrs | 2.99% | 3.88% | |
| Bank of Melbourne | Advantage Package Residential Fixed P&I 2 yrs 60-80% 150k+ | 2.99% | 3.90% | |
| St.George Bank | Advantage Package Residential Fixed P&I 2 yrs 60-80% | 2.99% | 3.90% | |
| Bank First | 2 Year Discounted Fixed Premier Package Home Loan O/O P&I | 2.99% | 3.93% | |
| BankSA | Advantage Package Residential Fixed P&I 2 yrs 150k+ | 2.99% | 3.94% | |
| Greater Bank | Standard Fixed 2 yrs | 2.99% | 4.08% | |
| Northern Inland CU | Introductory Home Loan P&I Fixed 2 yrs | 2.99% | 4.09% | |
| Greater Bank | Ultimate/Ultimate Discount Fixed 2 yrs 150k+ | 2.99% | 4.11% | |
| Newcastle Permanent | Premium Plus Package Residential Fixed IO 2 yrs 5k+ | 2.99% | 4.14% | |
| Newcastle Permanent | Premium Plus Package Residential Fixed P&I 2 yrs 5k+ | 2.99% | 4.16% | |
| People’s Choice Credit Union | Home Loan Package Residential Fixed P&I 2 yrs 100k+ | 2.99% | 4.25% | |
| Commonwealth Bank | Wealth Package Residential Fixed P&I 2 yrs 150k+ | 2.99% | 4.58% | |
| RAMS | Fixed Rate P&I 2 yrs | 2.99% | 4.73% | |
| Citi | Standard Fixed P&I 2 yrs 400k+ | 2.99% | 5.17% | |
| Source: www.canstar.com.au – 4/10/2019. Based on 2-year fixed loans for a loan amount of $400,000 and 80% LVR in Canstar’s Home Loans Database. *Comparison rate represents interest rate and fee costs combined into a single percentage figure, based on a loan amount of $150,000 and a loan term of 25 years. Table sorted lowest to highest by interest rate, followed by comparison rate; and then alphabetically by lender. | ||||
3-year fixed home loan interest rates below 3%
| 3 Year Fixed Home Loans Below 3% | ||||
| Lender | Loan | Rate | Comparison Rate* | |
| Reduce Home Loans | Home Owners Dream 3 Yrs Fixed | 2.79% | 3.04% | |
| RACQ Bank | Choices Residential Fixed 3 yrs 20k+ | 2.80% | 4.27% | |
| AMO Group | Residential Fixed 3 yrs | 2.89% | 3.35% | |
| RACQ Bank | Residential Fixed 3 yrs | 2.90% | 4.23% | |
| Pacific Mortgage Group | Residential Fixed P&I 3 yrs | 2.94% | 2.99% | |
| QBANK | Residential Fixed <95% LVR 3 yrs | 2.94% | 3.88% | |
| MOVE Bank | Ultra Low Lockit Home Loan 3 yrs | 2.98% | 4.06% | |
| CUA | 3 Year Fixed Owner Occupier P&I | 2.98% | 4.39% | |
| ANZ | Breakfree Residential Fixed 3 yrs 150k+ | 2.98% | 4.45% | |
| TicToc Home Loans | Live-in Fixed P&I 3 yrs | 2.99% | 3.07% | |
| Aussie | Select Basic Fixed PI 3 yrs 80% | 2.99% | 3.34% | |
| Adelaide Bank | SmartSaver/SmartFix P&I 3 yrs | 2.99% | 3.44% | |
| UBank | UHomeLoan Fixed PI 3 yrs | 2.99% | 3.45% | |
| IMB | Residential Fixed P&I 3 yrs 90% | 2.99% | 3.51% | |
| Citi | Mortgage Plus Standard Fixed P&I 3 yrs 400k+ | 2.99% | 3.54% | |
| Mortgage House | Advantage Fixed P&I 3 yrs | 2.99% | 3.54% | |
| RESI Mortgage Corp | Flexi Options Fixed P&I 3 yrs Special Offer | 2.99% | 3.59% | |
| Yellow Brick Road | Flexi Options Fixed P&I 3 yrs Special Offer | 2.99% | 3.59% | |
| Heritage Bank | Home Advantage Residential Fixed 3 yrs 150k+ | 2.99% | 3.67% | |
| Greater Bank | Great Rate/Great Rate Discount Fixed 3 yrs $150k+ | 2.99% | 3.79% | |
| BOQ | Residential Fixed 3 yrs Discount Rate 300k+ | 2.99% | 3.79% | |
| Aussie | Select Standard Fixed PI 3 yrs | 2.99% | 3.82% | |
| Suncorp Bank | Home Package Plus Owner Occupied Fixed P&I 3 yrs Special Offer | 2.99% | 3.84% | |
| Freedom Lend | Freedom Fixed PI 3 yrs 80% | 2.99% | 3.85% | |
| Bank of Melbourne | Advantage Package Residential Fixed P&I 3 yrs 60-80% 150k+ | 2.99% | 3.86% | |
| St.George Bank | Advantage Package Residential Fixed P&I 3 yrs 60-80% | 2.99% | 3.86% | |
| BankSA | Advantage Package Residential Fixed P&I 3 yrs 150k+ | 2.99% | 3.89% | |
| Bankwest | Complete Home Loan Fixed Rate Owner Occupied P&I 3 yrs 200k+ | 2.99% | 3.95% | |
| Northern Inland CU | Introductory Home Loan P&I Fixed 3 yrs | 2.99% | 3.97% | |
| Greater Bank | Standard Fixed 3 yrs | 2.99% | 3.98% | |
| Greater Bank | Ultimate/Ultimate Discount Fixed 3 yrs 150k+ | 2.99% | 4.04% | |
| BOQ | Home Loan Privileges Residential Fixed 3 yrs Discount Rate 300k+ | 2.99% | 4.06% | |
| Newcastle Permanent | Premium Plus Package Residential Fixed IO 3 yrs 5k+ | 2.99% | 4.06% | |
| Newcastle Permanent | Premium Plus Package Residential Fixed P&I 3 yrs 5k+ | 2.99% | 4.08% | |
| People’s Choice Credit Union | Home Loan Package First Home Buyer Fixed P&I 3 yrs | 2.99% | 4.17% | |
| Commonwealth Bank | Wealth Package Residential Fixed P&I 3 yrs 150k+ | 2.99% | 4.46% | |
| Heritage Bank | Residential Fixed 3 yrs | 2.99% | 4.46% | |
| RAMS | Fixed Rate P&I 3 yrs | 2.99% | 4.58% | |
| Citi | Standard Fixed P&I 3 yrs 400k+ | 2.99% | 4.97% | |
| Source: www.canstar.com.au – 4/10/2019. Based on 3-year fixed loans for a loan amount of $400,000 and 80% LVR in Canstar’s Home Loans Database. *Comparison rate represents interest rate and fee costs combined into a single percentage figure, based on a loan amount of $150,000 and a loan term of 25 years. Table sorted lowest to highest by interest rate, followed by comparison rate; and then alphabetically by lender. | ||||
4-year fixed home loan interest rates below 3%
| 4 Year Fixed Home Loans Below 3% | ||||
| Lender | Loan | Rate | Comparison Rate* | |
| Adelaide Bank | SmartSaver/SmartFix P&I 4 yrs | 2.99% | 3.42% | |
| Greater Bank | Great Rate/Great Rate Discount Fixed 4 yrs $150k+ | 2.99% | 3.71% | |
| Bank of Melbourne | Advantage Package Residential Fixed P&I 4 yrs 60-80% 150k+ | 2.99% | 3.81% | |
| St.George Bank | Advantage Package Residential Fixed P&I 4 yrs 60-80% | 2.99% | 3.81% | |
| BankSA | Advantage Package Residential Fixed P&I 4 yrs 150k+ | 2.99% | 3.84% | |
| Greater Bank | Standard Fixed 4 yrs | 2.99% | 3.88% | |
| Greater Bank | Ultimate/Ultimate Discount Fixed 4 yrs 150k+ | 2.99% | 3.97% | |
| Source: www.canstar.com.au – 4/10/2019. Based on 4-year fixed loans for a loan amount of $400,000 and 80% LVR in Canstar’s Home Loans Database. *Comparison rate represents interest rate and fee costs combined into a single percentage figure, based on a loan amount of $150,000 and a loan term of 25 years. Table sorted lowest to highest by interest rate, followed by comparison rate; and then alphabetically by lender. | ||||
5-year fixed home loan interest rates below 3%
| 5 Year Fixed Home Loans Below 3% | ||||
| Lender | Loan | Rate | Comparison Rate* | |
| Adelaide Bank | SmartSaver/SmartFix P&I 5 yrs | 2.99% | 3.40% | |
| Citi | Mortgage Plus Standard Fixed P&I 5 yrs 400k+ | 2.99% | 3.51% | |
| Greater Bank | Great Rate/Great Rate Discount Fixed 5 yrs $150k+ | 2.99% | 3.64% | |
| Bank of Melbourne | Advantage Package Residential Fixed P&I 5 yrs 60-80% 150k+ | 2.99% | 3.77% | |
| St.George Bank | Advantage Package Residential Fixed P&I 5 yrs 60-80% | 2.99% | 3.77% | |
| Greater Bank | Standard Fixed 5 yrs | 2.99% | 3.78% | |
| BankSA | Advantage Package Residential Fixed P&I 5 yrs 150k+ | 2.99% | 3.80% | |
| Greater Bank | Ultimate/Ultimate Discount Fixed 5 yrs 150k+ | 2.99% | 3.92% | |
| Citi | Standard Fixed P&I 5 yrs 400k+ | 2.99% | 4.61% | |
| Source: www.canstar.com.au – 4/10/2019. Based on 5-year fixed loans for a loan amount of $400,000 and 80% LVR in Canstar’s Home Loans Database. *Comparison rate represents interest rate and fee costs combined into a single percentage figure, based on a loan amount of $150,000 and a loan term of 25 years. Table sorted lowest to highest by interest rate, followed by comparison rate; and then alphabetically by lender. | ||||
Image source: Monkey Business Images (Shutterstock)
Share this article