Despite Australia’s official cash rate having remained unchanged for some time, lenders have continued to slash their home loan rates, with a new leader emerging in “the mortgage rate wars”.
Online lender Freedom Lend is now offering the record-low variable rate of 2.17% for new customers with a deposit of 30% of more.
“The fight is on between the non-bank lenders to have the lowest variable rate in Australia,” said RateCity.com.au research director Sally Tindall.
“Over the last couple of months, smaller providers have had to chip away at their rates in order stay ahead of the big banks. Today, Freedom Lend has upped the ante in a home loan rate war that refuses to cool down.”
According to the RateCity.com.au database, 15 lenders have cut more than 50 variable home loan rates for new customers this month alone.
“Just three months ago, the lowest variable rate was 2.44%. Since then it has dropped 27 basis points,” said Tindall.
“With the number of new home loans on the decline, lenders desperately need new business so they’re looking to refinancers to make up the difference.
“The recent increase in refinancing activity suggests rock bottom rates are prompting people to switch to take advantage of the relentless market competition.”
