Small lenders cut rates as RBA stands still

Home loan providers continue to cut interest rates in a bid to grab further market share.

According to Michelle Hutchison, head of PR and money expert at comparison website Finder, loans.com.au currently offers the lowest variable rate in Australia, which is now at 4.54%.

"The war between home loan lenders has been taken up a notch, with loans.com.au fighting back, following UBank's move to cut its variable rate home loan," said Hutchison.

"loans.com.au today reduced its Dream Home Loan Variable Blackboard Special Rate, by 0.06 percentage points to remain the lowest in Australia," she explained.

"This follows UBank announcing its move to lower its UHomeLoan to 4.54% effective today, which was previously the lowest rate held by loans.com.au."

Other smaller lenders have done the same following the Reserve Bank's announcement that the overnight cash rate will remain at 2.5% for another month.

Firstmac has dropped the rate for its VIP Package Product to by five basis points to 4.69%, also waiving a $295 annual fee. The interest rate on Advantedge's white label loan product for loans over $500,000 is now reportedly 4.63%, with a maximum 80% loan to value ratio.

St George has cut its three year fixed rate package by 10 basis points – with an Advantage Package Discount, the rate is now at 4.79%.

The major banks appear to have kept their interest rates on hold following Tuesday's announcement, with ANZ yesterday confirming that it will not cut its rates this month. Its standard variable home loan rate remains at 5.88%.