Reduce Home Loans does it again: New lowest variable rate loan

Could your budget benefit from a lower home loan interest rate? Image source: Wayhome studio, Shutterstock.

Reduce Home Loans just beat itself to offer the lowest variable home loan on Canstar’s database after slashing its rates even further, but it no longer holds first place for the lowest fixed rate loans.

Non-bank lender Reduce Home Loans has surpassed all others on variable rates, including the four major banks, by lowering its Low Rider Variable home loan by 0.15 percentage points to the new record low of 2.29% (comparison rate 2.32%) on Friday.

That beats the record-low rate it introduced in April after cutting its Rate Slasher Variable home loan to 2.39% (comparison rate 2.39%), which was the lowest variable rate home loan on Canstar’s entire database, until now.

The new cheapest rate is available to owner-occupiers paying principal and interest (P&I) who have a loan-to-valuation ratio (LVR) of up to 70%.

The lender also introduced some more rate reductions to its other variable home loans. These are the new rates:

2.29% (comparison rate 2.32%) – Low Rider Variable P&I home loan for borrowers with up to 70% LVR, reduced by 0.15 percentage points
2.45% (comparison rate 2.45%) – Rate Buster Variable P&I home loan for borrowers with up to 80% LVR, reduced by 0.04 percentage points
2.79% (comparison rate 2.79%) – Investor Rate Lovers P&I home loan for borrowers with up to 80% LVR, reduced by 0.05 percentage points

Borrowers looking for a fixed rate loan with Reduce Home Loans weren’t quite as lucky, with the lender having increased its one, two and three-year fixed rate home loans for owner-occupiers by 0.10 percentage points on the same day to 2.19% (comparison rates 2.69%, 2.66% and 2.63%, respectively).

→ Related story: Refinancing a home loan during coronavirus: Is now a good time?

Where can I find the lowest variable and fixed rate loans?

Here are some of the lowest rates on Canstar’s database at the time of writing for borrowers with a 20% deposit.

Top variable rate home loans for owner-occupiers paying principal & interest

2.29% (comparison rate 2.32%) – Reduce Home Loans’ Low Rider Variable 70%
2.44% (comparison rate 2.47%) – Homestar Finance’s Star Essentials 80% OO 150-850k
2.49% (comparison rate 2.49%) – Freedom Lend’s Freedom Variable P&I 80%
2.49% (comparison rate 2.49%) – Pacific Mortgage Group’s Standard Variable P&I
2.53% (comparison rate 2.55%) – loans.com.au’s Smart Home Loan 75%

Source: www.canstar.com.au – 19 May 2020. Based on variable owner-occupier home loans on Canstar’s database for a loan amount of $400,000, 70% LVR and principal & interest repayments; excluding introductory and first home buyer only loans and showing one product per lender. Comparison rate calculated based on a loan amount of $150,000 repaid over 25 years. List sorted in ascending order by rate, followed by comparison rate, followed by alphabetically by lender.

Top fixed rate home loans for owner-occupiers paying principal & interest

One-year fixed lowest rate: 2.15% (comparison rate 2.51%) – Pacific Mortgage Group’s Residential Fixed P&I 1 yr
Two-year fixed lowest rate: 2.09% (comparison rate 2.68%) – Freedom Lend’s Fixed Home Loan P&I 2 yrs 80%
Three-year fixed lowest rate: 2.14% (comparison rate 3.62%) – ING’s Orange Advantage Residential Fixed 3 yrs 150k+

Source: www.canstar.com.au – 19 May 2020. Based on one, two and three-year fixed owner occupier home loans on Canstar’s database for a loan amount of $400,000, 80% LVR and principal & interest repayments; excluding introductory and first home buyer-only loans. Comparison rate calculated based on a loan amount of $150,000 repaid over 25 years. List sorted in ascending order by rate, followed by comparison rate.

The comparison tables below display some of the fixed rate home loan products on Canstar’s database with links to lenders’ websites, for refinancing owner-occupiers in NSW making principal and interest repayments on a loan of $350,000 with an 80% LVR. Choose between the 1-year fixed, 3-year fixed and 5-year fixed tabs to view results most relevant to you. The results are sorted by ‘current rate’ (lowest to highest). Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products.

Lowest interest rates for 1-year fixed home loans

*Comparison rate based on loan amount of $150,000. Read the Comparison Rate Warning.

Lowest interest rates for 3-year fixed home loans

*Comparison rate based on loan amount of $150,000. Read the Comparison Rate Warning.

Lowest interest rates for 5-year fixed home loans

*Comparison rate based on loan amount of $150,000. Read the Comparison Rate Warning.

→ Related story: Record low rates and predicted property price drop: Have the stars aligned for first home buyers?

Follow Canstar on Facebook and Twitter for regular financial updates.

Ellie McLachlan

Former Content Lead

Ellie McLachlan is the former Content Lead at Canstar, helping to shape and deliver the content strategy. She specialises in covering mortgage and everday money topics and breaking finance news. An experienced journalist, Ellie has made her mark working in digital, broadcast and print media, serving in positions such as Editor at News Corp Australia's Compare Money and also News.com.au's Best Of Money, as Story Strategy Coach at the Australian Conservation Foundation, as a lifestyle reporter at The Urban List, The Courier Mail and The Sunshine Coast Daily, as well as radio presenter at 4ZZZ. While at Canstar, Ellie has written well over 500 finance articles and her work is regularly referenced by other publishers, including Business Insider, The Motley Fool and The New Daily. Her expert financial commentary has been featured in publications such as Yahoo Finance and the Herald Sun. Ellie studied a Bachelor of Journalism and Arts (Peace and Conflict Studies) at the University of Queensland. Follow Ellie on LinkedIn, Twitter, and Canstar on Facebook. Meet the Canstar Editorial Team.

In this article