Despite a hold from the RBA last week, a growing number of online lenders have cut their interest rate to under 3%, in a move that is putting pressure on larger traditional banks to do the same.
The lowest advertised home loan rate listed by financial comparison site InfoChoice is 2.74% on a two-year fixed loan from Well Home Loans.
“No wonder more and more borrowers are heading online, rather than travelling to a branch office in business hours to apply for a home loan,” said Vadim Taube, CEO of InfoChoice.
“The rates from the online lenders are too low to ignore. The big banks aren’t ignoring them, they are reacting by cutting their own rates.
“Competition in the mortgage market is heating up and borrowers can get amazingly low rates by researching the good deals.”
Westpac has slashed its home loan rates by up to 1.30%, taking its lowest advertised rate to 3.24%.
“The current low interest rate environment is driving competitive offers for home buyers which, coupled with the new home loan incentives and discounts available, may make it an appealing time for Australians to start thinking about purchasing a home,” said Will Ranken, Westpac GM of home ownership.
Australia’s largest mutual bank, Heritage Bank, announced a new fixed rate under 3%.
“All lenders are under pressure at the moment and borrowers can get rates just by researching online and asking for a better deal,” said Taube.
“Borrowers who are prepared to switch and are armed with information about the best rates in the market can get big rate cuts right now because lenders are scrambling for business.
“[Borrowers] can lock those rate cuts in for up to four years on a fixed rate mortgage if they prefer certainty.”