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.
reduce low variable rate
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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.

Top 5 Lowest Rate Variable Home Loans
Lender Product Rate Comparison Rate*
Reduce Home Loans Super Saver Variable 2.19% 2.19%
Homestar Finance Star Essentials 80% OO 150-850k 2.39% 2.39%
TicToc Home Loans Live-in Variable P&I 2.39% 2.40%
Pacific Mortgage Group Variable P&I 2.44% 2.44%
Freedom Lend Freedom Variable PI 80% 2.49% 2.49%
Source: www.canstar.com.au – 16/06/2020. Based on variable owner-occupier home loans available for a loan amount of $400,000, 80% LVR, and principal & interest repayments; excluding introductory, special condition and first home buyer only loans. Comparison Rate calculated based on a loan amount of $150,000 repaid over 25 years. One product per institution is listed. Table sorted in ascending order by rate, followed by comparison rate. *Read the Comparison Rate Warning.

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.

“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%).

Lowest Variable & Fixed Rate Home Loans for any LVR
Lender Product LVRs Allowed Rate Comparison Rate*
Variable
Reduce Home Loans Super Saver Variable Up to 80% 2.19% 2.19%
1 Year Fixed
Newcastle Permanent Premium Plus Package Residential Fixed P&I 1 yr 5k+ Special Offer Up to 80% 2.18% 3.83%
2 Year Fixed
HSBC Residential Fixed P&I 2 yrs <80% Up to 80% 2.09% 2.98%
3 Year Fixed
bcu Residential Fixed P&I 3 yrs Up to 95% 2.16% 3.63%
5 Year Fixed
RACQ Bank Choices Residential Fixed 5 yrs 20k+ Up to 95% 2.49% 3.76%
Source: www.canstar.com.au – 19/06/2020. Based on owner-occupier home loans available for a loan amount of $400,000 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. Table sorted in ascending order by rate, followed by comparison rate. RACQ Bank home loan open to Queensland borrowers only.*Read the Comparison Rate Warning.

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