Now you can get a loan with an interest rate with a 3 in front of it!
Last week, the Reserve Bank of Australia cut interest rates to an unprecedented 1.75 per cent — the lowest it has been since World War II — to combat record low inflation and stimulate the slow-growing economy.
Now over a third of all lenders have now confirmed they will be cutting their variable rates for Australian home owners, with some of the smaller lenders offering up never before seen rates as low as 3.61 per cent.
Sally Tindall, money editor at RateCity.com.au, said that rates under 4 per cent would become increasingly more common.
“Right now there are around 20 lenders offering rates for owner-occupiers under 4 per cent, with some reducing their lowest variables to never seen before lows,” she said.
“If the RBA decides to cut again, we’re likely to see rock-bottom home loan interest rates of under 3.5 per cent, while rates under 4 per cent will become the new norm.
While a number of lenders were making history with their record-busting rates, there are almost 70 lenders yet to declare their hand.
But don’t be lured by rates alone [adrotate group=”8"]
Sure we all like paying lower interest rates, but as a property investor there’s more to getting a good loan than interest rates.
Currently most lenders have upped the ante on their serviceability criteria making it much harder for many property investors to get a loan.
So it’s more important to choose a lender that will give you the ability to borrow more and get a bigger property or a second property than it is to get a lower interest rate.
I’d rather pay an extra 0.5% or so and have the ability to borrow another $100,000 and leverage this into a bigger property than to get the lowest interest rate.
Now more than ever it is important to have an investment savvy finance broker on your side, one who can think strategically and one who is used to financing large property portfolios.
The Shakers:
Five of the lowest advertised ongoing variable rates
Lender
New lowest rate
Comparison Rate
Effective date
Home Star
3.61%
3.65%
5/05/2016*
Loans.com.au
3.63%
4.03%
05/05/2016*
Mortgage House
3.64%
3.64%
27/05/2016^
Reduce home loans
3.65%
3.66%
5/05/2016
Pacific Mortgage Group
3.70%
3.70%
17/05/2016
* New rates effective now for new customers and at a later date for existing customers
^ this product requires an LVR of 30%
The Movers:
Company
Cut
Effective Date
Notes
AMP Bank
0.20%
20/05/2016
ANZ
0.19%
13/05/2016
Australian Military Bank
0.25%
27/06/2016
Auswide Bank
0.20%
25/05/2016
Investors only receive 0.15% cut
Bank of Melbourne
0.25%
23/05/2016
BankSA
0.25%
23/05/2016
BankVic
0.25%
16/05/2016
Bankwest
0.20%
20/05/2016
Bendigo Bank
0.20%
30/05/2016
Investors only receive 0.15% cut
BOQ
0.25%
18/05/2016
Coastline Credit Union
0.25%
16/05/2016
Commonwealth Bank
0.25%
20/05/2016
CUA
0.25%
19/05/2016
Investors only receive 0.20% cut
Firstmac
0.25%
23/05/2016
Greater Bank
0.25%
9/05/2016
Heritage Bank
0.20%
23/05/2016
Homestar Finance
0.25%
5/05/2016
HSBC
0.25%
23/05/2016
IMB
0.25%
25/05/2016
Investors only receive 0.20% cut
ING DIRECT
0.25%
20/05/2016
loans.com.au
0.25%
4/05/2016
Mortgage House
0.25%
6/05/2016
Start date for existing customers 27 May
NAB
0.25%
16/05/2016
Newcastle Permanent
0.25%
19/05/2016
P&N Bank
0.14%
5/05/2016
Pacific Mortgage Group
0.25%
16/05/2016
QPCU
0.25%
23/05/2016
RAMS
0.25%
23/05/2016
Reduce Home Loans
0.20%
5/05/2016
St.George Bank
0.25%
23/05/2016
Suncorp Bank
0.20%
25/05/2016
Investors only receive 0.15% cut
UBank
0.25%
16/05/2016
Westpac
0.25%
23/05/2016
Yellow Brick Road
0.25%
9/05/2016
Interest only loans from 0.10% cut
Your Credit Union
0.25%
1/06/2016
Source of interest rate information: Rate City
Originally published at Property Update.
