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The Greater Bank threw the gauntlet on its competitors, slashing its 1 and 2 year fixed mortgage rates to 1.59% – a new record.
These rates, however, are only available to customers with properties in NSW, Queensland and ACT.
Bigger discount rate changes – for owner-occupants paying principal and interest
Note: To qualify for the reduced repayment rate, customers must be new to the bank, with a loan of $ 150,000 or more and an LVR of less than 90%.
The move follows recent cuts in 2-year fixed rates by leading banks such as St George, Bank of Melbourne and AMP.
The RateCity database shows that while long-term fixed rates are increasing, there have been many more cuts than increases in the 1-year, 2-year and variable rate categories.
Rate changes in the past month
| Lenders who cut | Lenders who have increased | Current lowest rate | |
| 1 year fixed | 2 | 0 |
1.59% |
| 2 years fixed | 7 | 0 |
1.59% |
| 3 years fixed | 2 | 3 |
1.85% |
| 4 years fixed | 0 | 7 |
2.14% |
| 5 years fixed | 1 | 8 |
2.27% |
| Variable | 23 | 1 |
1.77% |
Note: some lenders have changed more than one rate. The date range is August 22 to September 21, 2021.
Sally Tindall, research director at RateCity.com.au, said while long-term fixed rates were on the rise overall, the gloves were back in the battle for the lowest short-term fixed rates.
“Greater Bank threw the gauntlet on its competitors, dropping to a new record,” she said.
“Governor Lowe’s insistence that the spot rate will not increase until at least 2024 has given lenders the reassurance they need to keep their short-term fixed rates ultra-competitive.
“Last month, St George and Bank of Melbourne lobbied low-cost lenders by reducing their 2-year fixed rates to just 1.79%, previously the lowest in this category.
“Today Greater took that out of the park with their new 1.59% rate, but only if you have a property in NSW, Queensland or ACT.
“While most banks’ rates of return are significantly higher, these new fixed rates from Greater come back to a competitive rate of 2.19%, but only for new customers under certain conditions.
“It might be the lowest mortgage rate in Australian history, but before you jump in, make sure it’s right for your finances,†she said.
Lowest 1-year fixed rates
| Lender | Announced price |
| Big Bank |
1.59% |
| UBank, RACQ, Hume Bank, Bank of Us |
1.79% |
| TicToc, Well Home Loans, QBank, 86 400 |
1.84% |
Lowest fixed rates over 2 years
| Lender | Announced price |
| Big Bank |
1.59% |
| St George, Bank of Melbourne, Homestar Finance |
1.79% |
| ING, AMP |
1.84% |
Lowest 3-year fixed rates
| Lender | Announced price |
| UBank, 86,400 |
1.85% |
| ING, MOVE Bank |
1.89% |
| Credit Union SA, Banque Hume |
1.94% |
Lowest fixed rates over 4 years
| Lender | Announced price |
| Teachers’ Mutual, UniBank, Health Professionals Bank, Firefighters Mutual |
2.14% |
| Illawarra Credit Union |
2.15% |
| Hume Bank |
2.24% |
Lowest fixed rates at 5 years
| Lender | Announced price |
| Freedom loan |
2.27% |
| Bank Australia |
2.40% |
| UBank, ING, BankVic, IMB, QBank, Suncorp, RACQ Bank, Virgin Money |
2.49% |
Note: Rates are for homeowners paying principal and interest. Certain LVR requirements apply.
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