More than 100 home loans are less than 4%

There are more than 150 home loans on Canstar’s database with an advertised interest rate of less than 4%. This could be a great time to find a cheap home loan!

With the Reserve Bank (RBA) cutting Australia’s official cash rate to a historic low of just 1.75%, mortgage-holders are currently in the driver’s seat – particularly those with a bit of equity in their property and some good negotiating skills.

At time of writing on Canstar’s database there are a phenomenal and unprecedented 160-plus home loans with an advertised interest rate of less than 4% – some as low as 3.44% (4.32% comparison rate –Read the Comparison Rate Warning.).

And Canstar’s analysis of search behaviour of 135,000 visitors comparing home loans on its database so far this year shows that the sub-four decision is right on the money, with a low interest rate being a key driver when it comes to mortgage comparison.

For further information on variable home loan products available for refinancing, the below comparison table has been formulated with direct links to the providers website. These have been sorted by our star ratings (highest to lowest). Please note that this table features products that are based on a loan amount of $600,000 for a property in NSW with a LVR of 80%.

How much could borrowers potentially save on their home loan?

If you have some equity and good negotiating skills, then securing, say, a 3.50% interest rate could save you around $220 per month on a $300,000, 30 year home loan. That’s comparing a rate of 3.50% against the current average advertised variable rate of 4.77%.

Loan Amount $       500,000  $       400,000  $       300,000  $       250,000
Interest Rate 3.50% 3.50% 3.50% 3.50%
Monthly Repayment $2,245 $1,796 $1,347 $1,123
Interest Rate 4.77% 4.77% 4.77% 4.77%
Monthly Repayment $2,614 $2,091 $1,569 $1,307
Monthly Saving $369 $295 $221 $185

Source: Based on 30 year loan term, P&I repayments. Estimates only as an example.

Apply to the bank of Mum and Dad?

Prime Minister Malcolm Turnbull recently (and rather infamously) suggested, on radio, that parents should look to get their kids into the property market. Insensitive the suggestion may be, but there’s certainly an argument for applying to the bank of Mum & Dad to help out with a deposit, with a number of the lowest rate home loans only available for those with healthy equity (loan to value ratio) in their home.

As an example, the lowest rate home loan on Canstar’s database currently requires a 50% LVR – a big ask for many borrowers. Many of the lowest rate loans require an LVR of 80% or less. You can check out home loan rates here.

Also, please note that Canstar is an information provider and in giving you product information, as discussed above, Canstar is not making any suggestion or recommendation about a particular credit product. If you decided to apply for a home loan, you will deal directly with a financial institution, and not with Canstar. Rates and product information should be confirmed with the relevant financial institution. For more information, read our detailed disclosure, important notes and additional information.


Share this article