Smaller banks offering lowest home loan interest rates after RBA rate cuts: canstar
Making one simple change could save tens of thousands of dollars, and that's even before making extra repayments or throwing money into an offset account.
The average owner-occupier variable home loan rate is now at 5.8 per cent, comparison group Canstar estimates. So if you're on that rate or above, and especially if you're in the early years of a 30-year mortgage, it might be time to shop around for a better deal.
To give you an idea of what you could be paying, the lowest variable offering currently in the market is 5.34 per cent. For first home buyers it's even lower at 5.24 per cent.
Who's offering the best rates?
Smaller banks and non-bank lenders are offering the most competitive rates. Non-bank lender Pacific Mortgage Group is leading the pack with its 5.34 per cent variable loan but there are plenty of others sitting just slightly higher, per the table below. Again, keep in mind that Horizon's offering is only for first-home buyers.
All up, eight lenders are currently offering rates of 5.39 per cent, including People's Choice, RACQ Bank and Australian Mutual, while a handful more have rates as low as 5.44 per cent.
All up, 34 lenders now offer at least one variable rate under 5.5 per cent, according to Sally Tindall, head of research at Canstar.
'If your rate's above 5.8 per cent, alarm bells should be ringing. That's just the average, it's not even competitive,' she says.
If you're keen to stick with the big four banks, CBA, Westpac and ANZ are currently offering variable rates of 5.59 per cent, while NAB is the outlier at 5.94 per cent. These are the advertised rates but there's often wriggle room for the bank to do a better deal if, for example, your loan-to-value ratio is particularly low.
For those looking at fixed rates, there's a handful offering just under 5 per cent. But the cash rate is widely expected to fall further in the near term, meaning variable rates will continue to drop. Refinancing options
Do-it-yourself refinancing, that's dealing with the bank yourself rather than through a broker, can be a bit of a pain and time consuming but it can also pay off. Your broker isn't always going to tell you the absolute lowest rates on the market, only the ones they can get for you.
But if you've got a broker who can get you a competitive rate, it means they do all the legwork and you don't have to spend hours calling up each lender to get the best deal. Keep in mind, broker or not, switching lenders comes with fresh credit checks and invasive financial questions, as well as refinance fees that can range from $500 to $2000.
There's also the risk that you refinance and the Reserve Bank cuts rates but your new lender doesn't pass the cuts on. We may not see this in the current cycle, especially since Treasurer Jim Chalmers was straight onto the banks in February ordering them to pass the RBA cut on, but it's a risk to be aware of.
If you can't get a lender to give you a rate near the lowest in the market (5.34 per cent), getting it down from say, 6 to 5.5 per cent, will still mean a big saving. But there are traps to watch for, including the impact of stretching out your loan term back to 30 years.
Crunching the numbers for The Australian, Canstar has come up with a couple of scenarios that illustrate the point.
A borrower with a $600,000 home loan and 25 years left on their mortgage who refinances to 5.5 per cent and keeps their current loan term will potentially save almost $52,000 in interest. But if that same borrower extended the loan term back out from 25 to 30 years, their monthly repayments would drop by $459 but over the life of the loan they'd actually end up paying $55,000 more than if they'd done nothing at all.
Canstar's scenario assumes there's two more RBA rate cuts (which we expect this year), bringing the cash rate to a neutral 3.35 per cent. It also assumes the banks pass on these cuts. No frills, digital only
Other offerings in the market to look at are the no-frills, digital-only products like CBA's digi home loan and digital bank Up, which is backed by Bendigo Bank.
CBA's digi home loan rate for owner-occupiers is at 5.59 per cent while its offering for investors is a competitive 5.69 per cent. Unloan, another digital-only offering backed by CBA is even lower, at 5.49 per cent.
Like other lenders, CBA has seen a pick-up in customers looking to refinance since the RBA kicked off its rate-cutting cycle in February, according to its executive general manager for home buying, Dr Michael Baumann.
'It's a good trigger for customers to look at the interest rate they're paying and figure out whether they're on a good deal,' Baunmann says.
The bank has seen a doubling of applications on the digital home loan product in the past year.
And in a sign of an increasingly competitive market, CBA recently slashed its rates more than the RBA's 0.25 per cent May rate cut. Over the past six weeks the rate for owner occupiers has come down 31 basis points, while for investors it's down 43 basis points.
With market watchers tipping two more RBA rate cuts in the next few months, if you get your lender down to a rate of 5.49 or less before the next cut you could be looking at a rate that starts with a 4 within a few months. Business
The latest surge in Bitcoin, along with big players making investments in the sector, is retesting interest in the mysterious asset class. But is it for you? Business
From July 1 the way the ATO enforces unpaid debts is changing. For some, it means their interest bill is poised to double.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
News.com.au
36 minutes ago
- News.com.au
Barry FitzGerald: Magmatic adding serious value with WA gold deal
'Garimpeiro' columnist Barry FitzGerald has covered the resources industry for 35 years. Now he's sharing the benefits of his experience with Stockhead readers. One of Garimpeiro's pet peeves is coming across a junior explorer banging away at a single project rather than leveraging off their standing costs as an ASX-listed company by adding a second project to the portfolio. That is particularly so when there has been a tectonic shift in markets like there is now, with gold racing to more than $5200 an ounce in Aussie dollars – up a staggering 44% on 2024's average. So keep the flagship project bubbling along but use the downtime between drilling campaigns to add a gold project to the company's story because the reality is that there has never been a better time to be looking for the yellow stuff. That's just what a well-known explorer for potential tier-1 epithermal/porphyry style deposits in NSW's prolific East Lachlan region, Magmatic Resources (ASX:MAG), has done via the acquisition of the Weebo project on the Yandal greenstone belt in Western Australia. The East Lachlan hunt continues, including a joint venture at the Myall copper/gold project with Andrew Forrest's Fortescue (ASX:FMG), also the company's biggest shareholder. Myall and other prospects in the East Lachlan could well deliver a big discovery in time, and there has been plenty of encouragement on that front. But for pure gold exposure at a time when the market is in a mood to reward gold discoveries handsomely, Magmatic has rolled up its sleeves and added WA gold to its story, powering up its newsflow in the process. Magmatic was trading mid-week at 4.2c a share for a market cap of $18.1 million on issued capital, increased by the share consideration component of the Weebo acquisition. It was a 3.9c stock before the Weebo pick up, so it can be said that the added element of WA gold has attracted the market's interest. But remembering the market cap is still not challenging. Given the quality of the East Lachan interests, it could be suggested that at Wednesday's share price of 4.2c, Weebo comes at this stage comes for free. Value added That's despite Weebo having all the hallmarks of becoming a quick value-add for Magmatic. Located 30km southeast of Leinster, the Weebo ground covers about 50km of the southern Yandal greenstone belt. The ground includes two near surface prospects – Ockerburry and Scone Stone – where previous drilling has yielded some nice hits by a previous owner. They stand as advanced drill prospects and there are a bunch of less advanced prospects. Magmatic has put a local exploration team in place and expects that its maiden drilling program at Weebo will kick off in the September quarter. It is exciting stuff for a company with an $18.1m market cap. What makes Weebo particularly exciting is its location, smack bang in the middle of five gold mines with treatment plants – Vault Minerals' (ASX:VAU) Darlot, Gold Fields' Agnew-Lawlers, Bellevue Gold's (ASX:BGL) namesake operation, Northern Star Resources' (ASX:NST) Bronzewing and Northern Star's Thunderbox. While the hope would be that exploration success at Weebo delivers a standalone operation, the proximity of the regional treatment capacity lends itself to toll treatment opportunities, joint venture development and/or outright sale of ounces that Magmatic pulls together in a mineral resource estimate. Ounces in the ground In a $5200/oz environment ounces-in-the-ground are commanding a high value when there is a clear pathway to the ounces being whacked through a standalone treatment plant or one owned by a third party. By way of example only, Northern Star last year paid $12.5 million for the 177,000 inferred resource ($70 an ounce) at the Hobbes gold project – owned 80% by Solstice Minerals (ASX:SLS) and 20% by a private minority – to feed through its Carosue Dam operation. The year before NST paid Strickland Metals (ASX:STK) $61m in cash and shares for the 346,000oz Millrose deposit near the Jundee gold mine ($176/oz). Gold prices have moved substantially higher still, so smallish deposits have become even more valuable. Where Weebo ends up in terms of its scale remains to be seen. But it certainly delivers exploration excitement when the gold market is running hot. And who knows? That hunt for a tier-1 discovery in NSW could well come up trumps. That's particularly so when Mt York gets juiced up by the additional ounces expected to come from the big exploration push now underway. The views, information, or opinions expressed in this article are solely those of the columnist and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article. At Stockhead, we tell it like it is. While Magmatic Resources is a Stockhead advertiser, it did not sponsor this article.
Daily Telegraph
an hour ago
- Daily Telegraph
‘Had to wait': TikToker's horror ING ordeal
Don't miss out on the headlines from Banking. Followed categories will be added to My News. A Melbourne woman was left without money for two days after ING suspended her account for what they deemed to be 'suspicious activity'. In an ordeal that has left her switching banks, Katie McMaster posted to TikTok after being left without access to her card and unable to withdraw money due to a flag on her account. She said she was initially sent an email on Tuesday, telling her that her accounts had been suspended and she needed to verify her identity. Ms McMaster called ING to verify the email was legit, where she was told she would need to wait up to two days for the fraud team to get back to her. 'They said I need to wait for the fraud team to contact me. I can't speak to them, they wouldn't transfer me to them, I had to wait for them to email me,' she said in the video. After two days – and calling ING multiple times – Ms McMaster finally had her accounts unsuspended. She said the fraud team told her there was just 'one person' managing the fraud inbox. Speaking to Ms McMaster said the 'suspicious activity' turned out to be a transfer with her friend for payment of a Usher ticket. 'I don't know if my TikTok helped, but suddenly, they moved pretty quickly,' she said. Ms McMaster said the verification process as a whole did not feel secure. 'They're sending you emails but then when you ring them and you're on hold, they say ING will never ask you to provide verification via email,' she said. She also said she did not have the option to go into a branch, as there are none in Melbourne. 'It was frustrating just waiting, I probably wouldn't have minded so much if they kept me in the loop,' she said. Ms McMaster said she will be diversifying her banking in the future. Picture: TikTok The suspension on her account was removed two days later. Picture: TikTok Ms McMaster said she is now moving banks after being with ING for more than a decade due to the ordeal, with many users on TikTok commenting about similar experiences. A spokeswoman for ING said the bank does place temporary 'holds' on an account if the bank detects 'suspicious transactions'. 'This often involves temporarily placing a hold on a customer's account until we can confirm the transactions with the customer,' she said. 'We recognise that temporarily pausing activity on an account can impact customers, so we always check they have access to essential funds, ensuring they are not placed in financial hardship.' Originally published as 'Had to wait': TikToker's horror ING ordeal
Daily Telegraph
an hour ago
- Daily Telegraph
Supercars Darwin: Barry Ryan's frank verdict on fall of Erebus
Don't miss out on the headlines from Motorsport. Followed categories will be added to My News. Erebus chief executive Barry Ryan has offered a frank reflection on a crippling 18 months that has seen his title-winning team slip to last in the Supercars standings. After a fairytale start to the Gen3 era, which saw Erebus win both the drivers' and teams' titles in 2023, the squad has endured a string of well-publicised internal struggles. Will Brown defected to Triple Eight at the end of 2023, while reigning champion Brodie Kostecki missed the start of the 2024 season while in dispute with the team, which coincided with big name sponsors such as Coca-Cola walking away. Kostecki would later return and win the Bathurst 1000, however left to Dick Johnson Racing at the end of last season – along with both Erebus race engineers George Commins and Tom Moore. Will Brown left Erebus at the end of 2023. Picture: Brendan Radke Brodie Kostecki was another high-profile departure. Team principal Brad Tremain also left the squad at the end of 2024 with plans to pursue an opportunity in IndyCar in the US. That has prompted a significant, and ongoing, internal rebuild, highlighted by Ryan himself needing to take the race engineer role on Jack Le Brocq's car. It's been tough going for Le Brocq and rookie teammate Cooper Murray, too, with Erebus slumping to last in the teams' standings ahead of this weekend's Darwin Triple Crown. 'There's no hiding behind it; the last 18 months have been really hard on our team. Really hard,' said Ryan at Hidden Valley on Friday. 'Losing key people … our last rebuild was 2021 and we got Brodie and Will and no one believed, really, in that. And we won a championship two years later, and we won Bathurst the year after. 'We've gone back to where we were [in 2021]. 'It's hard on the team. To replace people like George, Tom and Brodie is really hard. Brad Tremain is going to kick goals in America. That's four key people out of the team, it's really tough to replace that. 'It's going to take time. We can't hide behind that. I can only do so much and the boys that I've had there for six, seven years can only do so much. 'Unfortunately I'm still race engineering, and I say that because I shouldn't be. I should be running the business. But until we can get the right person to do that role; we're trying to self-promote from within, we're trying to find an engineer we can just put in and be really successful. Cooper Murray was 11th in the second practice session in Darwin. 'It's a balancing act and I can't say I'm really enjoying it. We got to a point where we were beating Triple Eight and we wanted to be that team that was the best year in, year out. 'Massive respect to Roland Dane for what he did for that whole time he was there, and what they're still doing. We got there and we just couldn't keep the momentum. 'No matter what everyone thinks the reason is why. We just couldn't keep that momentum that teams like that can do. 'Anyway, it's a lesson learned, this whole situation. We'll try not to go through it again. 'We'll get there again. We're confident in our team. We've got a great bunch of loyal staff that want to stay on and want to see us get there again and win championships and Bathursts. 'We're still going to go to Bathurst trying to win there this year. We'll have the belief and we'll have the drivers than can do it.' Erebus showed signs of improvement on track on Friday, with Murray 11th in the second practice session and Le Brocq in 19th as Andre Heimgartner led the way for Brad Jones Racing ahead of Ryan Wood and Will Brown. This story was written by Speedcafe Originally published as Supercars Darwin: Barry Ryan's frank verdict on fall of Erebus
