The lowest interest rates and where to find them

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Queensland players are among those offering some of the best rates on the market right now.

Australia now has a historic low variable mortgage rate and the best fixed rates in over a generation — here are the lowest on the market right now and where to find them.

Market rate analysis by comparison firm RateCity has found that the lowest variable rate on the market right now is 3.09 per cent off Reduce — a figure which was announced by the non-bank lender yesterday.

“Reduce Home Loans launched a new product at 3.09 per cent, making this the new lowest ongoing variable rate. The product is for new customers with a 40 per cent deposit (60 per cent loan-to-value ratio, LVR),” a RateCity statement said.

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Close behind was Mortgage House which also dropped its lowest variable rate yesterday to 3.14 per cent — though it applies outside of New South Wales only and requires a 30 per cent deposit.

Homestar Finance also dropped theirs — to 3.24 per cent and loans.com.au has gone to 3.28 per cent.

Two non-bank lenders dropped variable rates to historic lows yesterday. Source: RateCity

RateCity.com.au research director Sally Tindall described it as a battle between the non-banks.

“Ideal borrowers are increasingly being rewarded with lower rates. If you’re an owner-occupier paying down your debt with a bit of equity up your sleeve you’re in the box seat when it comes to rates,” she said.

Owner-occupiers are “in the box seat” now, according to RateCity.

And the situation was expected to only get better for borrowers if the Reserve Bank of Australia cut its cash rate target again this year.

“If the RBA cuts again, we will almost certainly see variable rates drop below 3 per cent.”

The lowest one-year fixed rate was already below the magic 3 per cent mark, according to RateCity, out of Greater Bank at 2.99 per cent, as well as UBank whose 2.99 per cent rate begins tomorrow (June 14).

Tic Toc was at 3.39 per cent while RACQ was at 3.49 per cent one year fixed.

The lowest one-year fixed rate is already below 3 per cent. Source: RateCity

Reduce also had the lowest three-year fixed rate on the market at 3.19 per cent, RateCity found, followed by Queenslander bank BOQ and Virgin Money both on 3.39 per cent, and Loans.com.au on 3.48 per cent.

The lowest five-year fixed rate came out of the one of the Big Four banks, Westpac which now offers 3.49 per cent — but there is a qualifier there, with the offer only for first home buyers.

Greater Bank was next best (3.64 per cent) followed by Macquarie (3.79 per cent) and G & C Mutual (3.89 per cent).

Westpac is leading the five-year fixed offering though it’s for first home buyers only. Source: RateCity

The Reserve Bank board next meets for its monetary policy meeting in three weeks’ time on July 2.

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