New record mortgage interest rate of 1.95% at Easy Street
Could your budget benefit from a better interest rate for home loans? An exclusively online lender is now leading the rate race.
It seems almost every week we are announcing a new record mortgage rate, proof of the fierce competition in the mortgage interest rate market right now.
And the race for the lowest rates arguably couldn’t come at a more essential time for the many Australians who experience a high degree of money uncertainty in the midst of a pandemic and who may be wondering how. sustain their finances with a better interest rate.
Easy Street Financial Services – a physical branchless bank that is a division of Sydney-based Community First Credit Union – announced an ongoing variable interest rate offer of 1.95% (comparison rate 1.99%), available for a limited time.
This would be the lowest rate in Canstar’s home loan database at the time of writing, beating the second best variable rate of Loans.com.au by 1.99% (compare rate 2.56%) which is only available for a one-year introductory period.
Record-breaking Easy Street offer available to new owner-occupant customers pay principal and interest with a deposit of at least 20%, on loans over $ 750,000.
Applications were opened on August 4, and loans must be paid by October 31 to be eligible for the new rate, although Easy Street’s terms and conditions say it can withdraw the offer at any time.
This doesn’t leave a lot of time for potential borrowers to find a property and review the loan application process.
Canstar financial expert Steve Mickenbecker said Easy Street could go after a certain type of borrower with this limited time offer.
“Considering the very short availability period of this rate of 1.95%, it seems to be more targeted on the refinance market as new purchases, ”Mickenbecker said.
Canstar’s analysis reveals that if a hypothetical borrower switched from the average rate in our database to the Easy Street rate, they could save over $ 650 per month in mortgage payments and over $ 234,000 in interest on a loan. of $ 800,000 repaid in principal and interest over 30 years, assuming interest rates remain the same.
Easy Street also announced reductions from August 4 to its standard variable rates for new customers paying only principal and interest and interest, with owner-occupant rates reduced by 0.06 percentage points and rates of investor by 0.46 percentage point to 2.59% (comparison rate 2.63%).
However, existing customers did not receive rate relief for this cycle, with the lender’s standard variable rates remaining unchanged.
Do you want a fixed rate instead? More options below 2%
Easy Street’s parent company, Community First Credit Union, also changed the mortgage rate today, which allowed it to introduce both a fixed rate and a variable rate starting with a “1”.
The rates on its two-year fixed and two-year variable-rate introductory mortgage loans both suffered a rate cut of 0.30 percentage points, bringing them down to 1.99% (comparison rate of 3 , 25% for both products).
The large difference between advertised rates and loan comparison rates can be confusing, but is probably at least in part due to the fact that they have a fairly large annual fee of $ 395, although the application fee and the legal fees are waived. Lump sum loans also tend to have more features than standard loans.
Community First offers are available starting August 4 with funding required by October 31, and are only available to new customers with a minimum balance of $ 100,000, or existing customers with loan increases of up to less $ 50,000. A deposit of at least 20% is required.
At the end of the fixed two-year period, the interest rate will revert to 2.99% (comparison rate remaining at 3.25%) instead of the standard flat-rate variable rate of 3.74% (comparison rate 4.15%).