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Home loan rates offered for under 2% are making a big play, offering introductory home loan rates of 1.99 per cent, which are touted as the lowest variable rate in Australia.

They are also offering a two-year discounted variable rate of 2.09 per cent.

These rates are available to “new customers who apply for an owner-occupier loan paying principal and interest repayments” with a 20 per cent deposit.

“At 1.99 per cent, this is Australia’s lowest variable rate, but it’s important to remember that it only lasts for a year,” says Sally Tindall, research director at

“After 12 months, the loan reverts to an ongoing variable rate of 2.57 per cent, which is still competitive. It’s in the top 5 per cent of comparable rates in our database. It’s also lower than the ongoing variable rates on offer from the big four banks.

“It’s great to see the low-cost lenders upping the ante in the home loan rate war.

“With refinancing on the rise, we’re increasingly seeing ‘out of the box’ offers from lenders looking to attract new customers.

“Whether it’s a cashback special, an introductory rate or an offer to waive lenders mortgage insurance, do the maths to make sure you end up ahead.

“It’s also important to work out how regularly you’re likely to refinance. An introductory deal could work for someone who switches regularly, but if you are looking to set and forget, you might save more money opting for a loan with a lower ongoing rate,” she said.

This follows on from RBA Governor Philip Lowe encouraging customers to shop around for better rates during a speech on Tuesday.

“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, in lots of public forums, 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.”

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