Reduce Home Loans offers new record-low variable rate

The mantle for the lowest variable rate home loan on Canstar’s database now belongs to a non-bank lender.

On Tuesday, Reduce Home Loans introduced its new Owner Occupied Super Saver Variable loan, with a record low variable rate of 2.19% (comparison rate 2.19%). This rate is now the lowest on offer for variable loans on Canstar’s database.

The Super Saver loan is available to owner-occupiers paying principal and interest who have at least a 20% deposit. It is only available for a limited time, with approval required by 31 July, 2020.

Canstar finance expert Steve Mickenbecker said Reduce’s new rate was 1.28 percentage points below the average variable rate on Canstar’s database, and could see borrowers save $272 per month on the average $400,000 loan over 30 years – nearly $100,000 in total if rates stayed the same throughout that time.

“Current low rates make it a great time for many borrowers to ease the family budget with lower repayments,” Mr Mickenbecker said.

“For those coming out of COVID-19 in good financial shape, lenders are competing hard for their business.”

Canstar’s home loan database shows Reduce Home Loans is closely followed by Homestar and TicToc in offering variable rates under 2.40% to owner-occupiers paying principal and interest.

If you’re currently considering a home loan, the comparison table below displays some of the variable rate home loans on our database with links to lenders’ websites that are available for homeowners looking to Refinance. This table is sorted by Star Rating (highest to lowest), followed by comparison rate (lowest-highest). Products shown are principal and interest home loans available for a loan amount of $350K in NSW with an LVR of 80% of the property value and that offer an offset account. 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.

While rates continue to tumble for variable loans, Mr Mickenbecker said fixed rates are even sharper, down as low as 2.09% in some cases.

→Related article: June 2020 Home Loan Update: Some Of The Lowest Variable & Fixed Rates

“Fixed rates will be at the front line as the banks set out to entice Australians to use their time at home to consider refinancing their home loans to lower rates,” he said.

“Low fixed rates give consumers opportunities to lock in their repayments at all-time low interest rates.”

HSBC is among some of the lowest fixed rate providers on the market, offering a two-year fixed term rate of 2.09% (comparison rate 2.98%).

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