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UBank reduces and increases fixed rates: this is where you will find the biggest savings

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The lender’s lowest rates are their 1-year fixed rates, while they are actually increasing their 3-year rates.

Online lender UBank today cut several of its fixed rate home loans, while increasing others. The lender’s lowest rate is now a 1-year fixed rate of 1.79%, a decrease of 20 basis points.

Here are the rates that UBank is reducing:

  • UHomeLoan 1 year fixed – 80% LVR – Principal and interest occupied by the owner: 1.79% (vs. 1.99%)
  • UHomeLoan 1 year fixed – over 80% LVR – Owner-occupied capital and interests: 1.99% (vs. 2.19%)

These cuts represent very competitive offers. It’s hard to find a home loan with a rate as low as 1.79%.

How much would these lower rates save you? Let’s say you had a home loan of $ 450,000 over 30 years. With a rate of 1.99% your monthly repayments would be $ 1,661.

At 1.79%, that drops to $ 1,616. That’s a savings of $ 45 per month, or $ 540 per year.

Fixing for 1 year means you can get a low rate for 12 months without being stuck on a fixed loan for too long. While the loan will revert to a higher variable rate, refinancing is much easier with an adjustable rate loan than with a fixed rate loan.

Borrowers who want a longer fixed term should note that UBank increases these rates. UBank’s principal and 3-year fixed interest rates increase by 10 basis points, while its principal and 5-year interest rates increase by 25 basis points.

If you already have a fixed rate loan with UBank, these changes will not affect you. Once you’ve corrected, by definition, your rate stays where it is.

Mortgage rates have been insanely low since the Reserve Bank began a series of spot rate cuts in 2019. Fixed rates in particular have become very competitive. Many lenders now offer their lowest rates on fixed loans rather than variable rate loans (which historically are generally cheaper).

Need a mortgage? Check out mortgage rates across the market.


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