The interest rate price war in Australia has reached a new level as Homestar Finance announced what is now considered the lowest rate available anywhere in the country.
They cut their existing two-year fixed rate by 14 points to 1.74%, 5 points lower than the current lower rate offered by the previous lower rate, which was available from Westpac and their banking subsidiaries, St George, Bank of Melbourne and BankSA.
“We are delighted to offer the lowest 2-year fixed rate mortgage ever in Australia to Homestar Finance customers, with rates starting at just 1.74% per annum,” said Andrew Chepul, CEO of Homestar Finance. “It continues Homestar’s strong history as a market leader and helping Australians to own their own homes earlier. “
Mandy Sly, Executive Retail Distribution of Homestar Finance, added: “Our fixed rate home loans have always been popular with investors looking for cash security, and now they are becoming increasingly popular with first-time buyers. first-time buyers attracted by our low rates and personalized service. “
To take advantage of the loan, clients often have a loan-to-value ratio of 80% or less. Homestar also offers some of the best-in-class variable rate loans at 1.79%.
As the real estate boom continues and the spot interest rate remains as low as possible, the Big Four banks have cut each other down to offer their clients record interest rates on home loans.
Westpac fell to 1.79% last week, making its bid the lowest of any major bank in the market. It is believed that the price war will continue as long as house and mortgage prices rise and the cash rate stays the same.
The Reserve Bank of Australia (RBA) has shown no enthusiasm to change its historically low rate, which currently stands at 0.1%.
RBA Governor Philip Lowe recently said in a speech at Australia’s financial summit that the cash rate would be frozen until “at least 2024” due to weak wage growth.
Many experts, however, suspect that the cash rate will not stay that low for that long, with the ongoing real estate boom being the main factor that will force the RBA to move its schedule forward.