One of Australia’s leading digital banks has dropped its home loan rate to its “historical low.”
UBank has announced a 0.10% to 0.15% per annum out-of-cycle reduction to its variable home loan rates.
New owner occupier home loan customers paying principal and interest will now pay a 2.49% p.a. variable rate, which UBank said is the “lowest advertised variable home loan rate” in its 11-year history.
According to UBank, the rate changes are effective for both new and existing customers from 17 July and “could save customers around $400 in the first year on a $400,000 owner occupier home loan paying principal and interest.”
UBank executive Philippa Watson said that the change shows that the digital bank is “supporting its customers at a time when they need it most.”
“Owning your own home can be incredibly rewarding but the past six months have caused many Aussie homeowners to feel the pinch,” said Watson.
“We are glad to have supported so many of our home loan customers by offering repayment pauses to those who have needed some extra help during this time, and today’s announcement is an extension of that support.”
UBank has also announced a reduction to its UHomeLoan one-year and three-year fixed rates by 0.15% p.a. and will waive the rate lock fee of $395 for all new fixed rate loans that settle on or before 30 September.
For owner occupier home loans paying principal and interest, the new three-year fixed rate is 2.14% p.a. The new fixed rates were effective from 8 July.
“These are some of the sharpest home loan rates we have ever offered, and we hope they will help our customers during these uncertain times,” said Watson.
Since June 2019, UBank said that it has lowered its variable interest rates by 1.10% p.a. in total, “potentially saving customers an additional $4,380 on a $400,000 owner occupier loan paying principal and interest in the first year and a possible $85,654 over the 30-year loan term.”