How to give yourself an instant home loan interest rate cut

The Reserve Bank of Australia has kept the cash rate on hold but you can give yourself a rate cut anyway. Here are the best mortgage deals on the market.

Mortgage customers have missed out on a strongly-predicted rate cut but experts say this shouldn’t stop them from seeking out a cheaper deal.

The Reserve Bank of Australia has kept the cash rate on hold at 1.5 per cent today — it has failed to move since August 2016 — but mortgage rates remain as low as 3.44 per cent.

New analysis by financial comparison website RateCity found on a $300,000 30-year principal and interest loan smaller lenders including Reduce Home Loans and Freedom Lend are offering the cheapest deals, followed by loans.com.au and Mortgage House offering rates at just 3.48 per cent.

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RateCity’s spokeswoman, Sally Tindall, said despite the RBA failing to budge today customers could still make some significant headway into their loans if they paid more than the minimum monthly repayments.

“Don’t wait for the RBA to get yourselves a rate cut,” she said.

“There is a lot of competition in the market at the moment for new customers, you can get rates as low as 3.44 per cent.

“Use these low variable rates to your advantage.”

Home loan customers should make sure they are paying an interest rate with a “3” in front.

For a borrower on a $300,000 paying a rate of 4 per cent, if they dropped to a deal with the lowest rate at 3.44 per cent they could save more than $30,000 in interest charges.

Their monthly repayments would fall from $1432 to $1337.

A RBA rate cut was strongly predicted for today when latest inflation figures came in at zero and only 1.3 per cent for the year.

This is well below the target of 2-3 per cent.

Home Loan Experts’ managing director Otto Dargan said despite flat inflation and a “strong case to cut interest rates” the RBA has remained cautious.

“We’ve seen a drop in fixed home loan rates in the last month which indicates that the market is still expecting rates to fall, so we may not need to wait too long to see a rate cut,” he said.

CoreLogic’s head of research Tim Lawless said the latest inflation figures proved not enough “to drag interest rates lower.”

“Although the likelihood of a cash rate cut over coming months remains high,” he said. [e-mail]

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Lowest ongoing variable rates

• Reduce Home Loans, Rate Slasher, 3.44 per cent.

• Freedom Lend, Freedom Variable, 3.44 per cent.

• Loans.com.au, Smart home loan, 3.48 per cent.

• Mortgage House, Lifestyle First Refinancer Special Home Loan, 3.48 per cent.

• Homestar Finance, Star Essentials Home Loan, 3.49 per cent.

Source: RateCity.com.au.