Westpac Centre in Melbourne
Westpac Centre in Melbourne. Photo – Canva.
  • With the cash rate set to remain at 0.1%, home loan rates as low as 1.79% are available
  • Banks are offering sub-2% interest rates on new loans, with various conditions
  • Meanwhile, Westpac has also announced reductions to its SME loans to business

With the official cash rate likely to remain at 0.1% for well into 2022 and perhaps 2023 and beyond, Australian retail banks are becoming comfortable with offering ever-lower lending rates.

Westpac is the latest bank to announce a reduction on its fixed interest rate for home lending, offering a 1.79% rate for a two-year fixed owner-occupier loan, under certain conditions.

The bank’s headline rate for a new two-year fixed owner-occupier comes with principal and interest repayments and a $395 annual fee for loans over $150,000 in their ‘Premier Advantage’ package.

A quick look around rival banks sees Greater Bank still offering Australia’s lowest rate of 1.69%, one year fixed, for owner-occupiers, principal and interest.

UBank offers a 1.75% rate, three years fixed, for owner-occupiers paying principal and interest, which they call their “lowest ever advertised rate.” UBank claims there are no ongoing fees, and annual fees, with a $395 “rate lock” fee waived if loans settle on or before 31 March 2021.

Meanwhile, P&N Bank offers a 1.99% fixed interest rate home loan, with flexible repayment options during the fixed term.

CommBank is also advertising a headline 1.99% interest rate home loan, on four years fixed for owner-occupiers with their ‘Wealth Package’. This is for a minimum of $150,000 loans with no establishment or monthly fees.

The list above is not a comprehensive list, so if you are looking for a new home loan, then the advice is to do thorough research, look at all the fine print, and perhaps use a professional mortgage adviser to assist you.

For example, to access Westpac’s super-low rate, you will need a loan to value (LVR) ratio of less than 70%, which means you would have to put up at least 30% as a deposit.

SME Loans

Meanwhile, Westpac has announced interest rate reductions on its SME (small and medium enterprises) business loans under the federal government’s SME Guarantee Scheme.

A 3-year unsecured fixed loan’s interest rate has been reduced from 4.48% to 3.99% per annum, effective 1 March 2021. Three or five-year secured variable loans are available from 2.99%, and fully secured fixed and full drawn loans from 2.38%.

“It’s pleasing to see such positive indicators the economy is starting to recover, and there’s a clear opportunity for some businesses that may be in a position to invest for future growth, which many are telling us they are looking to do.

“We also know that some customers are still impacted and having a difficult time, and we continue to work with them and provide support through our hardship program.”

Guil Lima, Chief Executive of Westpac’s Business division

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Before investing in any asset, please do your own independent research, taking into account your own personal financial situation. This article does not purport to provide financial advice. See our Terms of Use.

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