The RBA may have decided to leave the cash rate unchanged at 0.25% yesterday, but that hasn’t kept lenders from cutting their home loan rates for new customers, particularly low-risk owner occupiers.
According to Sally Tindall, research director at financial comparison site RateCity.com.au, “The best way to get a rate discount is to turn yourself into a new customer."
“The banks are offering up some of the lowest rates we’ve ever seen. Switching lenders could potentially free up hundreds of dollars per month for people in a position to refinance.”
Potential impact of moving from average variable owner occupier rate to lowest fixed rate of 2.09%
“Australians who are struggling financially shouldn’t be afraid to ask for a rate cut either. Banks have made it clear they want to help people affected by COVID-19 where they can,” Tindall continued.
Borrowers considering signing up for a fixed loan have been encouraged to do ample research first as they’re less flexible than their variable counterparts; however, as Tindall noted, “a lot of people are looking for certainty right now above everything else.”
Currently, ING, Reduce Home Loans and Well Home Loans are offering one of the lowest fixed rates on the market at 2.09% for two years.
Reduce Home Loans also boasts one of the best variable rates at 2.29%.
For comparison, the average variable owner occupier P&I rate is 3.45%. The average at the big four banks is 3.67%.