Digital lender OneTwo recently cut rates on its variable home loan offering, placing it among the most competitive home loans in the Mozo database.
The OneTwo Variable Rate Home Loan, which is available exclusively to refinancers in Metro New South Wales and Victoria, is now offered with a low variable rate of 1.89% per annum (comparative rate of 1 .79% per year *).
The new $5,000 cash back offer is available to homeowners who refinance a loan of at least $500,000. It is important to note that you must apply before March 31, 2022 and pay before June 30, 2022 to be eligible (terms and conditions apply).
In addition to the repayment offer, OneTwo will also reward borrowers with an interest rate reduction of 0.03% per annum each time 5% of the original loan amount is repaid. The rebate is capped at 0.15% per year
Additional repayments can also be made on the loan without incurring any fees. OneTwo says it will match any additional repayments made in the first six months, up to a total of $2,500.
Variable rates continue to fall
While many of the best fixed rate deals have disappeared over the past year, variable rates have only gone from strength to strength.
Since March 2021, the average variable rate has fallen from 3.28% per year to 3.04% per year, a difference of 24 basis points.
OneTwo is currently one of 16 lenders in our database with variable rates that start with a “1”.
But because variable rates move with the cash rate, borrowers should keep in mind that the rates they sign up for now may increase at any time in the future.
Although the Reserve Bank of Australia has signaled its willingness to be patient, a number of private sector economists are confident that it will hike rates several times over the next few quarters.
More recently, NAB revised its rate hike forecast to register a move in August. He also expects the RBA to raise the key rate two more times in September and November, which would leave it at 0.75% by the end of the year.
* ATTENTION: This comparison rate only applies to the example or examples given. Different amounts and durations will result in different comparison rates. Costs such as withdrawal charges or prepayment charges, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed corresponds to a guaranteed loan with monthly principal and interest repayments of $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges, and therefore the total cost of the loan, may vary depending on your loan amount, loan term and your credit history. Actual repayments will depend on your personal circumstances and changes in interest rates.
^ See Mozo Experts Choice Home Loan Awards information
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