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Records slashed as the lowest rate home loan drops to 1.59 per cent

Records slashed as the lowest rate home loan drops to 1.59 per cent

Greater Bank has thrown down the gauntlet to its competitors, cutting its 1- and 2-year fixed mortgage rates to 1.59 per cent – a new record low.

These rates, however, are only available to customers with properties in NSW, Queensland and the ACT.

Greater Bank rate changes - for owner-occupiers paying principal and interest

Old rateNew rateLowest revert rate
Great Rate 1-year fixed

1.69%

1.59%

2.19%

Great Rate 2-year fixed

1.79%

1.59%

2.19%

Note: To qualify for the discounted revert rate, customers must be new to the bank, with a loan size of $150,000 or over and an LVR below 90%.

The move follows on the heels of recent cuts to 2-year fixed rates by prominent banks such as St George, Bank of Melbourne and AMP.

The RateCity database shows while longer-term fixed rates are rising, there have been significantly more cuts than hikes in the 1-year, 2-year and variable rate categories.

Rate changes over the last month

Lenders that have cutLenders that have hikedCurrent lowest rate
1-year fixed20

1.59%

2-year fixed70

1.59%

3-year fixed23

1.85%

4-year fixed07

2.14%

5-year fixed18

2.27%

Variable231

1.77%

Note: some lenders have moved more than one rate. Date range is from 22 August to 21 September 2021.

Sally Tindall, research director at RateCity.com.au, said while longer-term fixed rates were broadly on the rise, the gloves were back on in the battle for the lowest short-term fixed rates.

“Greater Bank has thrown down the gauntlet to its competitors, dropping to a new record low,” she said.

“Governor Lowe’s insistence the cash rate will not rise until at least 2024 has given lenders the assurance they need to keep their short-term fixed rates ultra-competitive.

“Last month St George and Bank of Melbourne put pressure on the low-cost lenders by cutting their 2-year fixed rates down to just 1.79 per cent, previously the lowest rate in this category.

“Today Greater has knocked this out of the park with its new 1.59 per cent rate, but only if you have a property in NSW, Queensland or the ACT.

“While most banks’ revert rates are significantly higher, these new fixed rates from Greater revert to a competitive 2.19 per cent, but only for new customers under certain terms and conditions.

“This might be the lowest mortgage rate in Australia’s history, but before you jump in, make sure it suits your finances,” she said.

Lowest 1-year fixed rates

LenderAdvertised rate
Greater Bank

1.59%

UBank, RACQ, Hume Bank, Bank of Us

1.79%

TicToc, Well Home Loans, QBank, 86 400

1.84%

Lowest 2-year fixed rates

LenderAdvertised rate
Greater Bank

1.59%

St George, Bank of Melbourne, Homestar Finance

1.79%

ING, AMP

1.84%

Lowest 3-year fixed rates

LenderAdvertised rate
UBank, 86 400

1.85%

ING, MOVE Bank

1.89%

Credit Union SA, Hume Bank

1.94%

Lowest 4-year fixed rates

LenderAdvertised rate
Teachers Mutual, UniBank, Health Professionals Bank, Firefighters Mutual

2.14%

Illawarra Credit Union

2.15%

Hume Bank

2.24%

Lowest 5-year fixed rates

LenderAdvertised rate
Freedom Lend

2.27%

Bank Australia

2.40%

UBank, ING, BankVic, IMB, QBank, Suncorp, RACQ Bank, Virgin Money

2.49%

Note: rates are for owner-occupiers paying principal and interest. Some LVR requirements apply.

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This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

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