The 12 lowest discounted rates available for home borrowers as RBA likely to hold firm in May

Expectations among economists are that the Reserve Bank will leave the cash rate unchanged at is monetary policy meeting next week.

Chief economists like Michael Blythe from the Commonwealth Bank expect the RBA to leave the cash rate unchanged till the middle of next year and this is also the median forecast of the most recent Bloomberg survey of 25 economists.

Borrowers not wanting to be tied down by a more restrictive fixed-rate home loan may qualify for a discounted variable rate home loan, either for the first 12 months of the loan (called a honeymoon loan) or for the life of the loan (called an ongoing discount loan).

According to Mortgage Choice March figures, ongoing discount home loans accounted for 36% of all loans arranged by Mortgage Choice brokers, with the product particularly appealing to borrowers in NSW/ACT and WA, where over 40% of borrowers chose this loan type.

Honeymoon loans accounted for just 3% of loans arranged by Mortgage Choice brokers.

A discounted home loan may have a deposit or loan size requirement, come with higher fees or only be available as part of a package offering.

And borrowers who take out a honeymoon loan must budget for a rise in their home loan repayments once the introductory period ends.

These are some of the lowest discount offerings of the major banks and non-bank lenders as of April 29:

Discount rate offerings:

Provider

Loan name

Minimum loan size

Maximum LVR

Annual fee

Rate

Loans.com.au

Blackboard Special

$50,000

80%

$0

4.99%

UBank UHomeloan $100,000 80% $0 5.12%

Yellow Brick Road

Empower Package Home Loan

$100,000

80%

$0

5.15% for first year, then reverts to 5.49%

Commonwealth Bank

1 Year Guaranteed rate

$10,000

80%

$8 per month

5.19% then reverts to “relevant variable rate”

iMortgage

Fusion ProPack Discounted Variable Home Loan

$30,000

95%

$0

5.24%

HSBC

Value Loan

$100,000

80%

$0

5.25%

Family First Credit Union

12 month introductory loan

$20,000

90%

$0

5.30% then reverts to 5.55%

Homeloans.com.au

Ultra Plus 75

$30,000

75%

$330

5.49%

NAB

Choice Package

$500,000

Not disclosed online

$395

5.53%

Westpac

Premier Advantage Package + Choice transaction account

$500,000

Not disclosed online

$0

5.51%

ANZ

Breakfree Home Loan Package

$500,000

75%

$375

5.60%

Commonwealth Bank

12 Month Discounted Variable Rate

 

$10,000

80%

$8 per month

5.70%

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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