November 27, 2022

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Compare Banks and Lenders with Home Loans Under 2%

Compare banks and lenders with home loans under 2%

When the Reserve Bank’s cash rate hit a historic low of 0.10%, many banks and lenders responded by slashing home loan rates to their lowest ever. 

The major banks were some of the first responders, sharply decreasing rates particularly on three and four-year fixed home loans in November 2020. Smaller lenders also cut sharply. In Savings.com.au’s market research there were at one stage more than 50 lenders with a home loan under 2%, and the lowest advertised rate seen was 1.59% p.a.

However, funding costs to banks and lenders are increasing – and so are home loan rates. Speculation of an RBA cash rate rise in 2022 is also pushing rates up, particularly on fixed home loans. Some fixed home loans have been increased by more than 100 basis points, potentially adding hundreds of dollars to the home loan repayment every month.

The selection pool of lenders offering ‘home loans starting with a 1’ is tightening, so what’s a borrower to do? Luckily there are still a rather large handful of lenders offering competitive home loan deals.

Compare home loans under 2%

There are quite a few lenders offering home loans under the 2% threshold, including larger banks, challenger banks, non-bank lenders, and customer-owned banks. These home loans are usually available across fixed or variable terms with a variety of loan-to-value ratios (LVRs). Owner occupiers get the lion’s share of home loan rates starting with a 1, however there are a handful for investors.

Be sure to also compare features of the home loan, including whether it comes with an offset account or redraw facility, and if it’s a packaged home loan. Also note the varying conditions between each product as well as the different comparison rates. This will be indicative of the extra fees you have to pay, such as a loan establishment fee, monthly or yearly account keeping fees and so on.



Lender

Rate Type Offset Redraw Ongoing Fee Upfront Fees LVR Lump Sum Repayment Additional Repayments Pre-approval

Variable More details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable – 2yr (LVR

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%

Variable More details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates – Celebrate (LVR

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Variable More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan – Prime (Principal and Interest) (Owner Occupied) (LVR

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

Variable More details
REFINANCE IN MINUTES, NOT WEEKS

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.

Variable More details
$2022 CASHBACK. T&Cs APPLYNO ONGOING FEESFREE REDRAW FACILITY

Live-in Variable Loan (Principal and Interest)

Fixed More details

Fixed Home Loan 2 year (Principal and Interest) (LVR

Fixed Home Loan 2 year (Principal and Interest) (LVR

Variable More details

Home Value Home Loan (Principal and Interest) (LVR

Variable More details
AN EASY ONLINE APPLICATIONPARENTS CAN SIGN AS GUARANTOR

Yard Home Loan (Principal and Interest) (Special) (LVR

Variable More details
NO ONGOING FEES100% FULL OFFSET ACCOUNTFREE REDRAW FACILITY

Ocean Owner Occupied (LVR

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of February 10, 2022. View disclaimer.

Variable home loans under 2%

The pendulum is swinging back to variable home loans, clawing back market share where at one stage nearly half of all new home loans were fixed. Variable home loans offer flexibility, often with the ability to pay unlimited extra amounts into the home loan, while also coming with extra features such as offset accounts.



Lender

Rate Type Offset Redraw Ongoing Fee Upfront Fees LVR Lump Sum Repayment Additional Repayments Pre-approval

Variable More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan – Prime (Principal and Interest) (Owner Occupied) (LVR

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

Variable More details
REFINANCE IN MINUTES, NOT WEEKS

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.

Variable More details
$2022 CASHBACK. T&Cs APPLYNO ONGOING FEESFREE REDRAW FACILITY

Live-in Variable Loan (Principal and Interest)

Variable More details

Home Value Home Loan (Principal and Interest) (LVR

Variable More details
PAY MORE TO LOWER YOUR RATE
Variable More details
FREE REDRAW FACILITYPARRENTS CAN SIGN AS GUARANTOR

Yard Home Loan (Principal and Interest) (Special) (LVR

Variable More details
NO ONGOING FEES100% FULL OFFSET ACCOUNTFREE REDRAW FACILITY

Ocean Owner Occupied (LVR

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of February 10, 2022. View disclaimer.

Investor home loans under 2%

As it stands, there are very few lenders catering towards the investment space with advertised rates under 2% p.a. Most tend to hover around the low-2% range. Regardless, there is still a smattering of home loans under 2% for investors, as seen below. As always, check the specific loan purpose, as well as the comparison rate, and LVR requirements.

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of February 10, 2022. View disclaimer.

Home Loans Under 2% for Small Deposits

Many of the home loans with the lowest advertised rates are generally for borrowers with 20% or greater deposits. If you have a smaller deposit, say 10% (i.e. 90% LVR) your options could be limited. However, there are a handful of lenders available – with some even offering home loans under 2% with as little as 5% deposit – as seen below.

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of February 10, 2022. View disclaimer.

Why does the comparison rate matter?

It’s all well and good to have a home loan with an advertised rate of less than 2.00% p.a. However, arguably the more important figure to look at is the comparison rate. While the advertised rate determines your base monthly repayment, it doesn’t take into account a few other things, which is where the comparison rate steps in.

For fixed loans, comparison rates also take into account revert rates, which explains why many fixed-rate and introductory-rate loans tend to have a much higher comparison rate relative to the advertised rate.

The comparison rate also accounts for yearly fees, monthly fees, package fees, settlement fees, exit fees and a myriad of other fees, such as for offset accounts and so on. The comparison rate, in Australia, is also based on a $150,000 loan for a 25-year term, in many circumstances. By some measurements the median house price in Australia’s capital cities has surpassed $1 million, so this figure might not mean much to you.

Lenders with home loans under 2%

Below is a list of lenders that offer or have previously offered home loans with advertised rates below the 2% mark.

ANZ

CommBank

Westpac

NAB

86 400

Adelaide Bank

AMP Bank

Aussie

Bank Australia

Bank First

Bank of Melbourne

Bank of Queensland (BOQ)

BankSA

Bankwest

BankVic

BCU

Bendigo Bank

Citi

Credit Union SA

Great Southern Bank (formerly CUA)

Endeavour Mutual

Freedom Lend

G&C Mutual

Greater Bank

Homeloans.com.au 

Homestar Finance

HSBC

Hume Bank

Illawarra Credit Union

IMB Bank

ING

LCU (Laboratories Credit Union)

loans.com.au

ME Bank

Mortgage House

MOVE Bank

Nano

Newcastle Permanent

Northern Inland Credit Union

P&N Bank

Pacific Mortgage Group

People’s Choice Credit Union

QBANK

Queensland Country Bank

RACQ Bank

RAMS

Reduce Home Loans

St.George Bank

South West Slopes Credit Union

Suncorp Bank

Sydney Mutual

Teachers Mutual Bank

Tic:Toc

UBank

Virgin Money

WLTH

Yard

First published 26 August 2020, last updated 8 February 2022.


Photo by Jonny_Joka on Pixabay

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers’ products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider’s web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.