In late June, Loans.com.au became the first lender in the country to offer a home loan rate of under 2 per cent, with their 1.99 per cent introductory rate.
Since then, nine other lenders have slid under the 2 per cent bar, prompting a race to the bottom that is now being led by Reduce Home Loans – who clearly do what they promise on the tin.
They first launched Australia’s lowest fixed rate a fortnight ago, with their 1.9 per cent offer. Now they have introduced a 1.89 per cent variable rate.
For comparison’s sake, this is 1.33 per cent lower than the Reserve Bank of Australia’s average customer rate, and 0.8 per cent under the lowest variable rate offered by a big four bank, according to figures from RateCity.
In mid-June, RBA Governor Philip Lowe encouraged customers to shop around for better rates.
“I encourage people who haven’t already taken up the opportunity to do that to look at their mortgage rate and look for a better deal,” he said.
“For many years I’ve been encouraging people to look at the rate they were getting from their bank, and if they weren’t getting a very low rate, go and knock on the door and set up a Zoom conference with their banker and ask for a better deal.
“And if the bank said no, go to another bank.”
Currently, 10 lenders are offering home loans under 10 per cent. Aside from Reduce, sub-two-per-cent loans can be secured at: Easy Street Financial Services, Homestar Finance, Greater Bank, Bank First, Community First Credit Union, Loans.com.au, People’s Choice Credit Unit, Bank of Us, and Hume Bank.