Now you can get a loan with an interest rate with a 3 in front of it!

Last week, the Reserve Bank of Australia cut interest rates to an unprecedented 1.75 per cent – the lowest it has been since World War II – to combat record low inflation and stimulate the slow-growing economy.

Now over a third of all lenders have now confirmed they will be cutting their variable rates for Australian home owners, with some of the smaller lenders offering up never before seen rates as low as 3.61 per cent. 

Sally Tindall, money editor at RateCity.com.au, said that rates under 4 per cent would become increasingly more common.low interest rates

“Right now there are around 20 lenders offering rates for owner-occupiers under 4 per cent, with some reducing their lowest variables to never seen before lows,” she said.

 “If the RBA decides to cut again, we’re likely to see rock-bottom home loan interest rates of under 3.5 per cent, while rates under 4 per cent will become the new norm.

While a number of lenders were making history with their record-busting rates, there are almost 70 lenders yet to declare their hand.

 But don’t be lured by rates alone 

Sure we all like paying lower interest rates,  but as a property investor there’s more to getting a good loan than interest rates. 

Currently most lenders have upped the ante on their serviceability criteria making it much harder for many property investors to get a loan.

So it’s more important to choose a lender that will give you the ability to borrow more and get a bigger property or a second property than it is to get a lower interest rate.

I’d rather pay an extra 0.5%  or so and have the ability to borrow another $100,000 and leverage this into a bigger property than to get the lowest interest rate.

Now more than ever it is important to have an investment savvy finance broker on your side, one who can think strategically and one who is used to financing large property portfolios.

The Shakers:

Five of the lowest advertised ongoing variable rates

Lender

New lowest rate

Comparison Rate

Effective date

Home Star

3.61%

3.65%

5/05/2016*

Loans.com.au

3.63%

4.03%

05/05/2016*

Mortgage House

3.64%

3.64%

27/05/2016^

Reduce home loans

3.65%

3.66%

5/05/2016

Pacific Mortgage Group

3.70%

3.70%

17/05/2016

* New rates effective now for new customers and at a later date for existing customers

^ this product requires an LVR of 30%

 

The Movers:

Company

Cut

Effective Date

Notes

AMP Bank

0.20%

20/05/2016

 

ANZ

0.19%

13/05/2016

 

Australian Military Bank

0.25%

27/06/2016

 

Auswide Bank

0.20%

25/05/2016

Investors only receive 0.15% cut

Bank of Melbourne

0.25%

23/05/2016

 

BankSA

0.25%

23/05/2016

 

BankVic

0.25%

16/05/2016

 

Bankwest

0.20%

20/05/2016

 

Bendigo Bank

0.20%

30/05/2016

Investors only receive 0.15% cut

BOQ

0.25%

18/05/2016

 

Coastline Credit Union

0.25%

16/05/2016

 

Commonwealth Bank

0.25%

20/05/2016

 

CUA

0.25%

19/05/2016

Investors only receive 0.20% cut

Firstmac

0.25%

23/05/2016

 

Greater Bank

0.25%

9/05/2016

 

Heritage Bank

0.20%

23/05/2016

 

Homestar Finance

0.25%

5/05/2016

 

HSBC

0.25%

23/05/2016

 

IMB

0.25%

25/05/2016

Investors only receive 0.20% cut

ING DIRECT

0.25%

20/05/2016

 

loans.com.au

0.25%

4/05/2016

 

Mortgage House

0.25%

6/05/2016

Start date for existing customers 27 May

NAB

0.25%

16/05/2016

 

Newcastle Permanent

0.25%

19/05/2016

 

P&N Bank

0.14%

5/05/2016

 

Pacific Mortgage Group

0.25%

16/05/2016

 

QPCU

0.25%

23/05/2016

 

RAMS

0.25%

23/05/2016

 

Reduce Home Loans

0.20%

5/05/2016

 

St.George Bank

0.25%

23/05/2016

 

Suncorp Bank

0.20%

25/05/2016

Investors only receive 0.15% cut

UBank

0.25%

16/05/2016

 

Westpac

0.25%

23/05/2016

 

Yellow Brick Road

0.25%

9/05/2016

Interest only loans from 0.10% cut

Your Credit Union

0.25%

1/06/2016

 

 Source of interest rate information: Rate City

 



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About

Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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