Tic:Toc drops mortgage rates way down low

Richard Whitten 8 May 2019 NEWS

Coins and a stock graph. Image: Getty Images

How low is a low rate? Try 3.39%.

The RBA kept the cash rate in place yesterday but speculation of a cut seems reason enough for online lender Tic:Toc to cut two of its more competitive rates.

It's great news for anyone looking for a cheaper home loan and has us wondering if this is the beginning of a rate cut riot.

Only a couple of Tic:Toc's rates have changed, but they were some of the lender's most competitive.

These are easily some of the lowest rates on the market right now.

To get an idea of how much a rate cut like this can save you let's examine how the repayments would change on a 30 year mortgage borrowing $500,000.

  • Monthly repayment at 3.59%: $2,270
  • Monthly repayment at 3.39%: $2,214

That's a saving of $56 a month or $672 in a year. Over the 30-year life a of a loan that's a huge difference.

And while that enticing 3.39% rate is only for the first year, it reverts to Tic:Toc's variable rate anyway, which means it will likely still be competitive.

Will we see more rate cuts like this soon?

It's definitely on the cards. 92% of Finder's experts are tipping a cut to the cash rate soon, which usually sees lenders passing on some or all of the cut to borrowers in the form of lower variable rates.

And many lenders have cut their fixed rates in the last few weeks, possibly in anticipation of even lower variable rates soon.

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