Customer-owned banks such as Credit Union Australia (CUA) and P&N Bank, as well as non-major bank ING, have reduced their fixed and variable rates for home loans and small-business loans.
The rate cuts have come after the Reserve Bank of Australia (RBA) cut the official cash rate from 0.25 per cent to a new record low of 0.10 per cent.
CUA home loans and SME loans
The bank has reduced rates across one-to-five-year fixed rate mortgages for borrowers looking to buy a new home or refinance an existing home, while small-business owners will receive a 15 bps cut on small-to-medium enterprises (SME) variable rate loans, or can choose to fix for three years at new reduced rates.
- 2.19 per cent for one-year fixed rate home loans for owner-occupiers;
- 2.09 per cent for two-year fixed rate home loans for owner-occupiers;
- 1.97 per cent for three-year fixed rate home loans for owner-occupiers; and
- 2.59 per cent for five-year fixed rate home loans for owner-occupiers.
The new rates are available from 12 November.
In addition to the 15 bps reduction in SME variable rate small-business loans, CUA is offering:
- 2.49 per cent for three-year fixed residential; and
- 2.99 per cent for three-year fixed commercial.
These changes are effective from 19 November.
Commenting on the rate changes, CUA CEO Paul Lewis said: “We recognise that this has been a tough time for many Australians. These moves will support home owners and small-business members alike to recover from the impact of COVID-19.”
The Western Australian customer-owned bank has decreased rates on home lending products by up to 0.10 per cent per annum for variable rates and 0.96 per cent per annum for fixed rates.
Effective from 20 November, the bank said the rate cuts are applicable for new and existing owner-occupiers and investors across the bank’s home loan, basic, simple and investor variable home lending portfolio.
Effective from 11 November, the three-year fixed home loan rate for new and existing owner-occupiers will be 1.99 per cent per annum.
In announcing the rate changes, P&N general manager Anna Pearce said the bank has made the decision to pass on as much of the RBA’s rate cut for customers.
“We acknowledge it has been a hard year for many, so unlike the major banks, we’ve passed this benefit on to put money back in our customers’ pockets,” Ms Pearce said.
“As a customer-owned bank, we are not here to make profits for third party shareholders, and any profits assist us to maintain our reserves and are required to ensure we have a sustainable business on behalf of our members.
“I encourage everyone to compare like-for-like product features and not just the advertised rates when reviewing their existing lending arrangements to optimise their personal financial situation.”
The non-major bank has announced new rates for owner-occupier fixed rate home loan loans that are combined with a variable rate Orange Advantage home loan.
According to the bank, where an owner-occupied fixed rate home loan with principal and interest repayments is combined with an owner-occupier Orange Advantage home loan with principal and interest repayments, a per annum interest rate discount will apply on the fixed interest rate home loan.
A $299 annual fee applies to Orange Advantage home loans.
A further 0.10 per cent per annum interest rate discount applies to the fixed interest rate loan (total of 0.20 per cent per annum interest rate discount) where the loan-to-value ratio is less than or equal to 80 per cent, and the loan settles between 13 November 2020 and 31 January 2021 (further discount offer).
“The further discount offer is a limited offer that can be withdrawn, varied or extended at any time at ING’s sole discretion,” the bank said.
The new fixed rates for a principal and interest owner-occupier loan with Orange Advantage, less than or equal to 80 per cent LVR include:
- 2.19 per cent per annum for a one-year fixed rate;
- 2.09 per cent per annum for a two-year fixed rate;
- 2.04 per cent per annum for a three-year fixed rate;
- 1.99 per cent per annum for a four-year fixed rate; and
- 2.19 per cent per annum for a five-year fixed rate.
Better Mortgage Management announces special product offer
The non-bank lender has announced that it has reduced rates and fees on its Alt Doc loan for its self-employed borrowers.
Rates for the Capital Uber Alt Doc loan will now start from 3.65 per cent, with risk fees from 0.25 per cent at 50 per cent loan-to-value ratio (LVR).
Commenting on the new rates, Better Mortgage Management managing director Murray Cowan said the product includes one form of income verification, cash out for business purpose, and payout of Australian Taxation Office (ATO) debt, which he said has been popular with brokers.
“Alt Doc products target self-employed customers who are becoming more popular as the economy recovers from the COVID lockdowns this year and we believe this special offer will provide greater incentive for these applicants to access additional capital, purchase a new home or pay down debt,” Mr Cowan said.
The product also now offers an option to purchase units (excludes high density location), has no additional rate loading for investment, and risk fee can be capped above 80 per cent LVR.
Additionally, there is an ability with the Capital Uber product to now accept one year's financials on full doc loans up to 80 per cent LVR at rates starting from 2.94 per cent, including the pay out of ATO debt.
The offer is available to new customers only and will end on 18 December 2020.
[Related: RBA announces emergency rate cut]
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.