- Greater Banks takes the title of Australia's lowest home loan rate
- The record low rate is now set at 1.69%
- The rate has a one-year expiry after which it will jump more than double
The lowest home loan rate in Australian history has now hit the market. Greater Bank has delivered borrowers the one-year fixed rate of just 1.69%.
Greater Banks replaces HomeStar Finance on the podium for the lowest available home loan rate. Their rate was previously the lowest at 1.79%.
According to Rate City’s research director, Sally Tindall, “Other low-cost lenders could challenge this rate in the coming months as they battle it out for the coveted title of Australia’s lowest rate mortgage,”
“At 1.69% this is the lowest home loan rate we’ve ever seen, but it’s important to remember that it only lasts for one year.
Borrowers will only enjoy these record low rates for the first year of their contract. After this, the relevant interest rate reverts to a variable 3.66%, more than double the original starting amount.
According to Rate City, a borrower with a $400,000 home loan at the average existing rate of 3.05%, would save up to $5,039 in the first year at Greater Bank’s new rate. After five years, however, the borrower would be $3,839 worse off.
Tindall says borrowers could still be better off if they “…keep on their toes and re-fix, refinance or renegotiate after the first year.”
“If you do decide to take up a fixed rate, diarise the end date and make sure you canvas your options before it expires.”
The new rates are exclusive to borrowers in NSW, Queensland and the ACT.
The change reflects a shift in the home loan market with lenders, particularly smaller banks, being prepared to drop rates to attract mortgages.