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Australia’s cheapest bank loans and how to save thousands of dollars a year by switching

Revealed: Australia’s cheapest bank loans and how to save thousands of dollars a year by switching

  • Financial experts Canstar said switching borrowers could save $ 4,296 per year
  • Monthly savings of $ 358 possible by switching from variable to cheap flat rate
  • Bank of Us offers the cheapest rate of 1.99 percent, but only for Tasmanians
  • British bank HSBC offers Australia’s cheapest two-year fixed rate of 2.09 percent
  • National Australia Bank subsidiary UBank has 2.14 percent fixed-rate mortgages

Australian home lenders can save more than $ 4,000 a year simply by switching mortgages.

HSBC now offers Australia’s lowest fixed-income loan of 2.09 percent for two years.

UBank, a digital banking subsidiary of National Australia Bank, now offers fixed one and three-year interest rates of 2.14 percent.

The Bank of Us offers Australia’s lowest rate of 1.99 percent, but is only available to existing customers or residents of Tasmania.

Australian home borrowers can save thousands of dollars a year simply by switching home loans.  Financial comparison website Canstar calculated that a borrower with an average $ 500,000 mortgage could save $ 4,296 for two years simply by switching to the lowest national fixed rate in Australia, from an average floating rate of 3.44 percent

Australian home borrowers can save thousands of dollars a year simply by switching home loans. Financial comparison website Canstar calculated that a borrower with an average $ 500,000 mortgage could save $ 4,296 for two years simply by switching to the lowest national fixed rate in Australia, from an average floating rate of 3.44 percent

Financial comparison website Canstar calculated that a borrower with an average $ 500,000 mortgage can save $ 4,296 for two years simply by switching to the lowest national fixed rate in Australia, at an average variable rate of 3.44 percent.

Cheapest home loans in Australia

Bank of Us: 1.99 percent flat rates for two and three years (available only to existing customers and Tasmanians)

HSBC: 2.09 percent, fixed for two years

UBank: 2.14 per fixed for one and three years

Source: Canstar

That’s based on monthly savings of $ 358 for a two-year fixed-rate loan for a borrower who made a 20 percent down payment.

A year ago, Reduce Home Loan with its Low Rider Variable product had Australia’s cheapest home loan rate of 2.89 percent.

The difference between the cheapest rate then and now would amount to $ 182 per month or $ 2,184 per year.

Steve Mickenebecker, Canstar group director, said now is a great time to become a first home buyer.

“Low interest rates lower the affordability threshold making it easier to get a loan,” he told Daily Mail Australia.

UBank cut its one- and three-year fixed rate loans by 0.15 percentage point this week, bringing interest rates to 2.14 percent for principal and interest holders.

“These are some of the most competitive home loan rates we’ve ever offered, and we hope they will help our clients in these uncertain times,” said UBank Director Philippa Watson.

UBank also waives the $ 395 fee for those settling on September 30.

HSBC now offers Australia's lowest fixed-income loan of 2.09 percent for two years.  Depicted is a branch in Sydney

HSBC now offers Australia's lowest fixed-income loan of 2.09 percent for two years.  Depicted is a branch in Sydney

HSBC now offers Australia’s lowest fixed-income loan of 2.09 percent for two years. Depicted is a branch in Sydney

Lenders charge exit fees to those who switch to another financial institution or break a fixed rate contract.

The Reserve Bank of Australia cut interest rates twice in March to a new all-time low of 0.25 percent.

The coronavirus pandemic has hit the housing market, and the value of new home loans fell by a record 11.6 percent in May – the worst monthly decline in the Australian Bureau of Statistics records dating back to 2002.

Homeowners’ loans declined by 10.2 percent and investor loans plummeted by 15.6 percent.

First home buyers living in their own home accounted for 37.4 percent of home loan obligations in April, a decade high, but declined to 36.7 percent in May.

UBank, a digital banking subsidiary of National Australia Bank, now offers fixed one and three-year interest rates of 2.14 percent

UBank, a digital banking subsidiary of National Australia Bank, now offers fixed one and three-year interest rates of 2.14 percent

UBank, a digital banking subsidiary of National Australia Bank, now offers fixed one and three-year interest rates of 2.14 percent

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