UBank cuts and raises fixed rates: Here’s where you’ll find the biggest savings

Posted: 27 July 2021 9:49 am
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The lender's lowest rates are its 1-year fixed rates, while it is actually raising its 3-year rates.

Online lender UBank today cut several of its fixed rate home loans, while raising others. The lender's lowest rate is now a 1-year fixed rate of 1.79%, a cut of 20 basis points.

Here are the rates UBank is cutting:

  • UHomeLoan 1 Year Fixed - 80% LVR - Owner Occupied Principal and Interest: 1.79% (down from 1.99%)
  • UHomeLoan 1 Year Fixed - over 80% LVR - Owner Occupied Principal and Interest: 1.99% (down from 2.19%)

These cuts represent very competitive offers. It's hard to find a home loan with a rate as low as 1.79%.

How much would these lower rates save you? Let's say you had a $450,000 home loan over 30 years. With a rate of 1.99% your monthly repayments would be $1,661.

At 1.79%, that falls to $1,616. That's a saving of $45 a month, or $540 a year.

Fixing for 1 year means you can get a low rate for 12 months without being locked in to a fixed loan for too long. While the loan will revert to a higher variable rate, refinancing is much easier with a variable rate loan than it is with a fixed rate loan.

Borrowers who want a longer fixed term should note that UBank is increasing these rates. UBank's 3-year fixed owner occupier principal and interest rates are rising by 10 basis points, while its 5-year principal and interest rates are increasing by 25 basis points.

If you already have a fixed rate loan with UBank these changes won't affect you. Once you fix, by definition your rate stays where it is.

Home loan rates have been incredibly low since the Reserve Bank began a round of cash rate cuts in 2019. Fixed rates in particular have become very competitive. Many lenders now offer their lowest rates on fixed loans rather than variable rate loans (which historically, are usually cheaper).

Need a home loan? Check out home loan rates from across market.

Find the right home loan now

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