As we swing into summer, there are now 126 home loans under 2 per cent on offer, from 50 separate lenders.
Ratecity.com.au reports that 40 per cent of the 124 lenders on their database have “at least one home loan rate starting with a ‘1’”.
Before the November 3 rate cut, there were just 11 lenders with rates under 2 per cent.
“At the start of this month a rate under 2 per cent was as rare as hens’ teeth. Today there’s well over 100 of them,” RateCity.com.au research director Sally Tindall said.
“On a $400,000, 30-year mortgage, a loan under 2 per cent costs less than $49 a day, even when paying down both principal and interest.
“Record low interest rates have supercharged people’s borrowing power,” Ms Tindall continued.
“As a result, some first home buyers are finally finding themselves in contention at open homes and auctions,” she said, pointing out the 51 per cent increase in the number of first home buyer loans over the past year.
“The formula of record low rates and government grants seems to have hit the sweet spot for many first home buyers. They’re finally enjoying their time in the sun.
“Two years ago, the lowest variable rate was 3.44 per cent. Today it’s 1.77 per cent and it’s not just the low-cost lenders that have moved. The whole market has been forced to follow behind them.
“Just last year, owner occupiers with a rate in the threes probably thought they had a cracking deal. Today, you’d be pretty mortified with that,” she said.