By Geoff Scofield, Westlawn Finance MD & CEO
21 July 2016
With the start of the new financial year, lenders have ramped up the competition for your home loan, enticing borrowers to switch by further slashing already record low interest rates on both fixed and variable rate home loans.
Here’s a summary of some of the latest home loan deals on offer.
National Australia Bank
On Monday 11 July, NAB fired the first shot in this latest battle for your home loan announcing it was cutting fixed interest rates for various owner-occupied home loans.
NAB cut interest rates across its 1, 2, 3 and 4-year fixed terms for owner-occupiers, taking rates to below 4% for all of these fixed terms.
The bank’s biggest cut was for its 4-year fixed rate, where it dropped rates from 4.59% pa to 3.99% pa, and for 1-year fixed terms, where the interest rate reduced from 4.39% pa to 3.99% pa.
The bank also sliced 0.14 percentage points off its 2-year rate, to 3.75% pa, and lowered 3-year rates by 0.10 percentage points to 3.89% pa. NAB made no changes to its variable rate loans.
Meanwhile, rival big four bank, ANZ, slashed its owner-occupier 2-year fixed rate to 3.90% pa.
On Thursday, 14 July challenger bank, Suncorp, launched its Better Together special offers for owner-occupiers and investors.
Suncorp’s new offering includes a variable rate of 3.92% pa on new owner-occupied Back to Basics home loans of at least $150,000 (maximum LVR of 90%). A rate of 4.19% pa is available for new investment borrowings.
Owner-occupiers will also have access to a competitively priced 4.14% pa on new loans of at least $150,000 (LVR between 90% and 95%).
According to Suncorp, the offers include “transactional banking, discounted Home and Contents Insurance as well as savings on fees”.
Bank of Queensland
Another challenger bank, Bank of Queensland (BOQ), has also made significant cuts to its investor and owner-occupier rates this month.
BOQ’s Investor Clear Path variable rate has dropped 70 basis points to 4.19% pa, while the owner-occupier variable rate for the bank’s Clear Path loan dropped 48 basis points to 3.99% pa.
BOQ has also cut its 3-year fixed rate by 60 basis points for owner-occupiers to 3.69% pa.
These new rates apply to new loan applications for home loans greater than $150,000 and a maximum LVR of 80%. These rates are not available for construction, restructure or refinance of existing BOQ facilities and SMSF loans.
Weigh up the pros & cons of switching first
These record low home loan interest rates could make it worthwhile switching home loans, depending on your individual situation. But like all important financial decisions, you first need to weigh up the pros and cons and check the fine print.
For example, some low introductory “honeymoon” rates may revert to much higher rates once the introductory period expires. You’ll also need to check the fees and charges on your existing loan and any home loan you’re considering. Given the vast number of different home loan deals currently on offer, it’s worth getting expert advice from a qualified mortgage broker before making any decision to switch and save.
Why use a mortgage broker?
As the above interest rate changes illustrate, the home loan market is constantly changing. New products regularly come onto the market offering a wide assortment of features and benefits. Fees, charges and interest rates also regularly change. Then there are changes to lending criteria which may result in a particular type of borrower becoming either eligible or ineligible for certain loans.
This constant change in such a competitive marketplace makes it difficult for borrowers to keep well-informed on the multitude of options available to them from the more than 2,000 home loan products on offer.
But, for a mortgage broker, keeping well-informed and up to date with the home loan market is their business.
If you’re considering switching to save with the record low interest rates now on offer, contact a Westlawn Mortgage Broker. We can help you find the right home loan package to suit your needs. We’ll also support you throughout the home loan application process.
Read our earlier article on Fixed rate home loans proving popular: Why more borrowers are making the switch.
To talk to a Westlawn Mortgage Broker, call us today on 1300 WESTLAWN (1300 937 852).
Offers current as at 19 July 2016. Offers subject to change by lender at any time. Check lender’s website for details. Conditions apply. Information provided for illustration purposes only and do not constitute an offer.