14 more lenders drop home loan rates

14 more lenders drop home loan rates

HSBC, Bankwest, AMP and Bendigo Bank are among 14 lenders to cut home loan interest rates since the last RateCity.com.au update yesterday.

HSBC is not passing on the full 0.25 per cent RBA cut, instead opting to drop their variable home loan rates by 0.22 per cent. That takes HSBC’s lowest owner-occupier interest rate to 3.47 per cent, effective from Monday 17 June.

BankWest has passed on Tuesday’s RBA rate cut in full, and the lowest owner-occupier rate it offers is now 3.89 per cent, which will be available from June 25.

Keep across the changes with RateCity’s live list of who is cutting, by how much and when: https://www.ratecity.com.au/rba-cash-rate.

Here’s the list of lenders who have cut since our last update:

  • Adelaide Bank (-0.20%)
  • AMP (-0.25%)
  • Aussie (-0.25%)
  • Bank Australia (-0.25%)
  • BankWest (-0.25%)
  • Bendigo Bank (-0.20%)
  • Citi (-0.25%)
  • CUA (up to -0.25%)
  • Heritage Bank (-0.20%)
  • HSBC (-0.22%)
  • IMB (-0.25%)
  • ME Bank (-0.25%)
  • Pepper Money (-0.25%)
  • UBank (-0.25%)

The full list of lenders who have cut are:

Lender Rate change Date effective

Lowest ongoing variable rate

Comments
CBA -0.25% 25/06/2019 3.54%
Westpac -0.20% 18/06/2019 3.78% Investors on IO get -0.35%
NAB -0.25% 14/06/2019 3.54%
ANZ -0.18% 14/06/2019 3.63%
Adelaide Bank -0.20% 28/06/2019 3.67% IO customers -0.15% cut
AMP Bank -0.25% 21/06/2019 3.49% 24 June for existing customers
Athena Home Loans -0.25% 04/06/2019 3.34%
Aussie -0.25% 21/06/2019 3.69% Some changes 27 June
Auswide Bank -0.25% (up to) 06/06/2019 3.69% Only cut on one product
Bank Australia -0.25% 24/06/2019 3.44%
Bank of Melbourne -0.20% 18/06/2019 3.54%
BankSA -0.20% 18/06/2019 3.59%
BankWest -0.25% 25/06/2019 3.89%
BCU -0.25% 01/07/2019 3.54%
Bendigo Bank -0.20% 28/06/2019 3.59% IO customers -0.15% cut
BOQ -0.25% (up to) 25/06/2019 3.74% Clear Wealth customers -0.15%
Citi -0.25% 25/06/2019 4.27%
CUA -0.25% (up to) 18/06/2019 3.50% Some customers as little as 0.10%
Greater Bank -0.25% 11/06/2019 3.57%
Heritage Bank -0.20% 21/06/2019 3.57%
Homestar Finance -0.25% 04/06/2019 3.24%
HSBC -0.22% 17/06/2019 3.47%
IMB -0.25% 21/06/2019 3.54%
ING -0.25% 25/06/2019 3.34%
Macquarie Bank -0.25% 21/06/2019 3.44%
ME Bank -0.25% 27/06/2019 3.54%
Newcastle Permanent -0.25% 17/06/2019 3.47%
Pepper -0.25% 24/06/2019 3.91%
Qudos Bank -0.25% (up to) 25/06/2019 N/A
RACQ Bank -0.25% 12/06/2019 3.44%
RAMS -0.20% 18/06/2019 3.79%
Reduce Home Loans -0.25% 04/06/2019 3.19% current customers up to -0.25%
St.George Bank -0.20% 18/06/2019 3.58%
Suncorp Bank -0.20% 21/06/2019 3.49%
UBank -0.25% 28/06/2019 3.34%
Virgin Money -0.22% 25/06/2019 3.56%

Credit cards

RateCity.com.au is not expecting many credit card rates to come down as a result of Tuesday’s cut to the cash rate, although low rate credit card provider, Auswide, did cut its credit card rate to 9.20 per cent following the RBA’s cash rate decision.

RateCity.com.au research director Sally Tindall said, “most credit card customers are going to be disappointed if they expect their provider to drop its credit card rate on the back of Tuesday’s RBA cut.”

“The best way you can get a credit card rate cut, is to shop around and find one yourself.”

“If you move from the average credit card rate of around 17 per cent, to the lowest rate on the market, you could knock almost 10 percentage points off your credit card interest rate,” she said.

The average credit card rate on RateCity.com.au: 17.2%

Low rate credit cards

Lender Name Rate
G&C Mutual Bank Low Rate Visa Card 7.49%
American Express Low Rate Card 8.99%
Community First CU Low Rate card 8.99%
Easy Street Easy Low Rate 8.99%
Northern Inland CU Low Rate Visa 8.99%

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Learn more about home loans

What happens to my home loan when interest rates rise?

If you are on a variable rate home loan, every so often your rate will be subject to increases and decreases. Rate changes are determined by your lender, not the Reserve Bank of Australia, however often when the RBA changes the cash rate, a number of banks will follow suit, at least to some extent. You can use RateCity cash rate to check how the latest interest rate change affected your mortgage interest rate.

When your rate rises, you will be required to pay your bank more each month in mortgage repayments. Similarly, if your interest rate is cut, then your monthly repayments will decrease. Your lender will notify you of what your new repayments will be, although you can do the calculations yourself, and compare other home loan rates using our mortgage calculator.

There is no way of conclusively predicting when interest rates will go up or down on home loans so if you prefer a more stable approach consider opting for a fixed rate loan.

Does the Rate Guarantee apply to discounted interest rate offers, such as honeymoon rates?

No. Temporary discounts to home loan interest rates will expire after a limited time, so they aren’t valid for comparing home loans as part of the Rate Guarantee.

However, if your home loan has been discounted from the lender’s standard rate on a permanent basis, you can check if we can find an even lower rate that could apply to you.

What is a standard variable rate (SVR)?

The standard variable rate (SVR) is the interest rate a lender applies to their standard home loan. It is a variable interest rate which is normally used as a benchmark from which they price their other variable rate home loan products.

A standard variable rate home loan typically includes most, if not all the features the lender has on offer, such as an offset account, but it often comes with a higher interest rate attached than their most ‘basic’ product on offer (usually referred to as their basic variable rate mortgage).

What is the difference between a fixed rate and variable rate?

A variable rate can fluctuate over the life of a loan as determined by your lender. While the rate is broadly reflective of market conditions, including the Reserve Bank’s cash rate, it is by no means the sole determining factor in your bank’s decision-making process.

A fixed rate is one which is set for a period of time, regardless of market fluctuations. Fixed rates can be as short as one year or as long as 15 years however after this time it will revert to a variable rate, unless you negotiate with your bank to enter into another fixed term agreement

Variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts however fixed rates do offer customers a level of security by knowing exactly how much they need to set aside each month.

How can I avoid mortgage insurance?

Lenders mortgage insurance (LMI) can be avoided by having a substantial deposit saved up before you apply for a loan, usually around 20 per cent or more (or a LVR of 80 per cent or less). This amount needs to be considered genuine savings by your lender so it has to have been in your account for three months rather than a lump sum that has just been deposited.

Some lenders may even require a six months saving history so the best way to ensure you don’t end up paying LMI is to plan ahead for your home loan and save regularly.

Tip: You can use RateCity mortgage repayment calculator to calculate your LMI based on your borrowing profile

What is the best interest rate for a mortgage?

The fastest way to find out what the lowest interest rates on the market are is to use a comparison website.

While a low interest rate is highly preferable, it is not the only factor that will determine whether a particular loan is right for you.

Loans with low interest rates can often include hidden catches, such as high fees or a period of low rates which jumps up after the introductory period has ended.

To work out the best value for money, have a look at a loan’s comparison rate and read the fine print to get across all the fees and charges that you could be theoretically charged over the life of the loan.

What is an interest-only loan? (include how do I work out interest-only loan repayments)

An ‘interest-only’ loan is a loan where the borrower is only required to pay back the interest on the loan. Typically, banks will only let lenders do this for a fixed period of time – often five years – however some lenders will be happy to extend this.

Interest-only loans are popular with investors who aren’t keen on putting a lot of capital into their investment property. It is also a handy feature for people who need to reduce their mortgage repayments for a short period of time while they are travelling overseas, or taking time off to look after a new family member, for example.

While moving on to interest-only will make your monthly repayments cheaper, ultimately, you will end up paying your bank thousands of dollars extra in interest to make up for the time where you weren’t paying off the principal.

How do I calculate monthly mortgage repayments?

Work out your mortgage repayments using a home loan calculator that takes into account your deposit size, property value and interest rate. This is divided by the loan term you choose (for example, there are 360 months in a 30-year mortgage) to determine the monthly repayments over this time frame.

Over the course of your loan, your monthly repayment amount will be affected by changes to your interest rate, plus any circumstances where you opt to pay interest-only for a period of time, instead of principal and interest.

How can I calculate interest on my home loan?

You can calculate the total interest you will pay over the life of your loan by using a mortgage calculator. The calculator will estimate your repayments based on the amount you want to borrow, the interest rate, the length of your loan, whether you are an owner-occupier or an investor and whether you plan to pay ‘principal and interest’ or ‘interest-only’.

If you are buying a new home, the calculator will also help you work out how much you’ll need to pay in stamp duty and other related costs.

What does going guarantor' mean?

Going guarantor means a person offers up the equity in their home as security for your loan. This is a serious commitment which can have major repercussions if the person is not able to make their repayments and defaults on their loan. In this scenario, the bank will legally be able to the guarantor until the debt is settled.

Not everyone can be a guarantor. Lenders will generally only allow immediate family members to act as a guarantor but this can sometimes be stretched to include extended family depending on the circumstances.

How does it work? What are the steps involved?

To check your rate, start by entering your contact details and home loan information at ratecity.com.au. We’ll compare your current home loan to other options in our database, and let you know how much you could save by refinancing.  

If we can’t beat your current rate, you can claim a $100 gift card by confirming your home loan details with us.*

Whether we find you a lower rate or not, all entries will go in the draw to win a chance at $1 million.^

How does an offset account work?

An offset account functions as a transaction account that is linked to your home loan. The balance of this account is offset daily against the loan amount and reduces the amount of principal that you pay interest on.

By using an offset account it’s possible to reduce the length of your loan and the total amount of interest payed by thousands of dollars. 

Example: If you have a mortgage of $500,000 but holding an offset account with $50,000, you will only pay interest on $450,000 rather then $500,000.

How can I get a home loan with no deposit?

Following the Global Financial Crisis, no-deposit loans, as they once used to be known, have largely been removed from the market. Now, if you wish to enter the market with no deposit, you will require a property of your own to secure a loan against or the assistance of a guarantor.

Why do people use no credit check loans?