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% |
