Super low 1.59% home loan rate – but what’s the catch?
Greater Bank has dropped some of its fixed rate home loans to just 1.59% – the lowest mortgage rate on the market by far.
The bank has made this announcement right as other lenders, including all of the Big Four banks, have increased their fixed rates.
But many non-banks and smaller lenders are offering very low interest rates right now, so it's a good time to consider refinancing to a cheaper deal.
So what's the catch with this particular loan, and how can you lock in this ultra-low rate?
Everything we know about Greater Bank's 1.59% home loan
- It's a fixed rate – This means you have to lock this rate in for a set period. It's not available on variable rate loans, which are more flexible and can have extra repayments or an offset account attached.
- You can choose from 2 time periods – The rate of 1.59% applies for a 1-year or 2-year fixed period. If you want a 3-year fixed rate, it jumps to 1.99%.
- It's only available in certain states – You must be a borrower located in NSW, ACT or Queensland. If you're in Victoria, Tasmania, SA, NT or WA, then unfortunately you're not eligible.
- You need a deposit or equity – This rate applies on loans with just a 10% deposit or 10% equity. This is really competitive, as majority of lenders require a 20% deposit.
- It's for homeowners only – To qualify for this rate, you must be an owner-occupier. For investors, the rate is 1.99% for a principal and interest loan or 2.09% for an interest-only loan.
- You can be refinancing – To get this low 1.59% rate, you can either be purchasing a new property or refinancing your existing home loan, including refinancing from a Greater Bank variable rate.
- You can also be a first home buyer – If you have relatives willing to act as a guarantor on your loan (i.e. provide a guarantee over your deposit), you may be able to borrow with a deposit of less than 10%.
Is this rate available to existing Greater Bank customers?
Usually, when banks offer a cut-price offer like this, it's on offer to new customers only.
But that doesn't mean existing customers have to miss out.
If you're a customer with Greater Bank and you want to access this great rate, follow the lead of our senior home loans writer Richard Whitten.
He called his bank to see if they would match his home loan rate with the super discounted rate they offered new customers.
Learn how Richard stopped getting ripped off on his mortgage
How much could you save with this home loan?
There's no doubt about it – this is the cheapest rate the home loan market has seen in some time, and that's saying something! The market has been very competitive for the last 18 months, so this surprise rate cut is going to be greatly appreciated by borrowers.
The actual savings on offer here could be massive. The average 2-year fixed rate home loans are currently around 1.99%, but if you're on a variable rate, you could be paying up to 2.5% on your loan or even more.
We'll be conservative and assume you're paying 1.99%. Let's take a look at a few different price points for principal and interest home loans over 30 years:
| Current home loan | Monthly repayment on the current interest rate of 1.99%* | Monthly repayment on the new interest rate of 1.59% | Interest savings per month/year |
|---|---|---|---|
| $500,000 | $1,845 | $1,747 | $98/m $1,176/y |
| $750,000 | $2,768 | $2,621 | $147/m $1,764/y |
| $1,000,000 | $3,691 | $3,495 | $198/m $2,352/y |
Keep in mind, these savings apply for each year that you have the home loan, so your savings over time could be tens of thousands of dollars.
How can you apply for this 1.59% fixed rate home loan?
To apply for the 2-year fixed rate home loan with Greater Bank, hit the white button on this link that says "go to site".
To apply for the 1-year fixed rate home loan with Greater Bank, hit the white button on this link that says "go to site".
If you don't qualify for this loan, there are still plenty of other super low home loans to choose from.
