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UBank Home Loan Interest Rate 2.34% Variable Rate / 1.95% 3-Year Fixed Rate

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UBank Home Loan Interest Rate 2.34% Variable Rate / 1.95% 3-Year Fixed Rate
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P[Deactivated] on 06/11/2020 - 15:07 ubank.com.au (1559 clicks)
Last edited 06/11/2020 - 15:48

Effective 29 November, variable rates for owner occupier and investor (principal & interest and interest only) will reduce by 0.15% p.a. New owner occupier principal & interest variable rate customers will receive 2.34% p.a. (comparison rate 2.34% p.a.).

Effective 13 November, UHomeLoan 3-year Fixed Rate will reduce by 0.19% p.a. to 1.95% p.a. (comparison rate 2.36% p.a.*) for Owner Occupier (principal and interest) and the Rate Lock Fee of $395 won’t apply for all new fixed rate loans that settle on or before 31 March 2021.

Here’s some info and key dates for customers with applications already in progress:

What if my variable interest home loan hasn’t settled yet?
All new customers currently applying for a variable interest rate UBank home loan will get the new reduced variable rate from 29 November 2020.

What if my home loan settles on or after 29 November 2020?
If your loan settles on or after 29 November 2020, you’ll get the new reduced variable interest rate from your settlement date.

What if my home loan settles before 29 November 2020?
If your loan settles before 29 November 2020, the current variable interest rate for your home loan will apply up until 29 November 2020. From 29 November 2020, the new reduced variable rate will apply.

Here’s some info and key dates for existing home loan customers:

When will the variable home loan interest rate change happen?
The 0.15% p.a. rate reduction will apply from 29 November 2020.

Will my repayments reduce automatically?
Depending on how your repayments have been set up, they may reduce when the new lower interest rate takes effect. If there’s a change to your repayment, we’ll send you a letter to let you know what your new repayment will be. Keep a look out for a letter that will be sent to you, which will outline more information on your new repayment details.

I am already on a fixed interest rate, will I receive the discount?
Once your fixed interest period ends, your home loan will switch to the variable interest rate applicable at that time.

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closed Comments

  • TheGreatBab on 06/11/2020 - 15:12
    +2

    Is this the first lender to pass on full rate cut for variable rates ?

    • [Deactivated] on 06/11/2020 - 15:13
      +8

      Athena did it first!

      • tightm8 on 06/11/2020 - 15:34
        +2

        They kinda had to after the backlash from the previous rate cut, where they didn't. (i think they claim they always match)

        • bio on 06/11/2020 - 16:25

          They are still lower than UBank, so that means that UBank did not pass one or more in the past.

          • soan papdi on 06/11/2020 - 16:30
            +1

            @bio: Ubank didn't pass on the second 0.25% cut from earlier this year afaik

        • aleayr on 06/11/2020 - 17:55
          -1

          They don't claim to always walk in step with the RBA, rather that all customers get the same rates (in the LVR tiers).

    • SBOB on 06/11/2020 - 16:36

      Got an SMS today from homestar passing it on for existing loan

  • PROZ on 06/11/2020 - 15:41
    -8

    I don't recommend this bank. Worst customer service. You will suffer.

    • DrRalph on 06/11/2020 - 15:47
      +7

      I've had very good experiences over the last 4 years. These are one of the few who usually pass on the rate cuts.

    • EyyBanane on 06/11/2020 - 15:51
      +5

      Can I ask you what happened?

    • SanAndreas23 on 06/11/2020 - 16:27

      They are definitely slow to pickup the phone, I've been on hold for 40 mins+ when I was applying for my home loan (non-covid times) which was quite frustrating, but after that it hasn't been too bad.

  • MuddyClear on 06/11/2020 - 15:46
    +7

    Don’t go fixed.

    • chrism238 on 06/11/2020 - 16:18

      You think rates will go lower (in the next 3 years)?

      • tessel on 06/11/2020 - 16:56
        +6

        I think the view is if fixed is lower than variable, then banks expect rates to drop so they lock you in at higher so variable will drop below your fixed rate and they milk you. If fixed is higher than variable, then they expect rates to go up so they lock you in at higher so they can milk you for more while rates slowly climb but you are locked in at a higher rate still. That's my understanding. Probably totally wrong :-).

        • [Deactivated] on 06/11/2020 - 17:42

          Banks are like a casino, very hard to outsmart, as such best to play with what you are comfortable with. Historically 2% is a very good rate, could it go lower sure but only time will tell.

        • [Deactivated] on 06/11/2020 - 22:14

          The cost of going fixed is already factored into the risk. They will make money in most cases.

        • El-Rhi on 09/11/2020 - 06:36
          +2

          Probably totally wrong :-)

          You’re right on one thing at least

          • tessel on 09/11/2020 - 12:06

            @El-Rhi: Thanks! Since you know I and probably others here would love to know how it works. Look forward to your correct info 😊

            • El-Rhi on 09/11/2020 - 12:45

              @tessel: Banks can access cheaper fixed rate funding compared to variable rate funding, hence the difference for borrowers. This is due to what the RBA has been doing with their term funding facility and bond buying program.

              • OhNoUShiz on 09/11/2020 - 14:04
                +1

                @El-Rhi: so, is it impossible to find a bank not making profit then?

              • tessel on 09/11/2020 - 17:38

                @El-Rhi: Great. Thanks! Imagine if you had replied with that originally 😉

      • drfuzzy on 07/11/2020 - 13:48

        I am told approximately 80% of consumers who lock in rates lose and 20% win against just sitting in variable.
        Question is: are you smart enough to be one of the 20%?

    • Master Bates on 06/11/2020 - 16:21

      This, imagine being locked in at 1.95% when the Bank could be paying you to have a mortgage.

      It’s already happening overseas, article here.

      • serpserpserp on 06/11/2020 - 18:24
        +2

        You should probably read the article you posted:

        The Danish bank offered a rate of -0.5 per cent, however borrowers weren’t being paid to have a mortgage. In fact, when you factored in fees and costs, borrowers were still paying additional charges on the loan’s principal.

        • Master Bates on 06/11/2020 - 20:07
          +1

          You sir (or madam) have missed the point. The fact of the matter is, don’t lock yourself in to a fixed rate when variable rates will likely fall further.

          • serpserpserp on 06/11/2020 - 20:36
            +3

            @Master Bates: Whatever. Your point was clearly:

            when the Bank could be paying you to have a mortgage.

            Which is just untrue.

            • Master Bates on 06/11/2020 - 22:15

              @serpserpserp: Alright mr internet policeman sir, you got me… I didn’t fully read the article I linked.

              I shouldn’t have linked an Australian article (which I thought might have more relevance to my fellow Australians) without reading it fully and instead of the actual article I read.

              Here is the article I read and the quote from the horses mouth is:

              “We don’t give you money directly in your hand, but every month your debt is reduced by more than the amount you pay,” said Jyske’s housing economist, Mikkel Høegh.

              So in essence you are being paid to have a mortgage.

              • serpserpserp on 06/11/2020 - 22:56
                +2

                @Master Bates: Feels like you are scurrying around to back solve your position. Because if you had read that article as well you would have noticed:

                In reality, the Jyske mortgage borrower in Denmark is likely to end up paying back a little more than they borrowed, as there are still fees and charges to pay to compensate the bank for arranging the deal, even when the nominal rate is negative.

                So in essence you are paying for a mortgage still.

                • Master Bates on 07/11/2020 - 00:09

                  @serpserpserp: Your feelings are wrong young padawan. But if it helps you sleep at night, believe what you will.

                  as there are still fees and charges to pay to compensate the bank for arranging the deal

                  Fees and charges for setting up the loan sure, I agree.

                  It sounds like your time and energy would be better spent fact checking Trump's claims of fraud.

                  • serpserpserp on 07/11/2020 - 09:26

                    @Master Bates:

                    Fees and charges for setting up the loan sure, I agree.

                    Yep. The key piece being "end up paying back a little more than they borrowed"., nothing from a bank is truly free.

                    It sounds like your time and energy would be better spent fact checking Trump's claims of fraud.

                    Reading two articles which took 2 minutes each really wasn't a lot of energy.

      • wisc on 06/11/2020 - 21:55

        They say Australia rates will never go negative due to the way we are set up…

        Was reading an article about it a while ago.

    • chid on 06/11/2020 - 16:24
      +1

      why not?

      • bio on 06/11/2020 - 16:25

        Break fees if you want to sell your house in the next 3 years.

        • chid on 06/11/2020 - 16:26

          and if I don't intend to sell in the next three years?

          • MuddyClear on 06/11/2020 - 16:47
            +1

            @chid:

            1. Annual repayment limits
            2. Break free charges
            3. Massive increase in interest rate after fixed rate ends, which offsets any money saved!
            • chid on 06/11/2020 - 17:32

              @MuddyClear:

              1. & 2. I agree with.

              Three. is a non issue as this is the same as variable rate?

              That said, when looking at total repayments (+ annual fees) - you save quite a lot. Additionally the fact that there are repayment limits isn't a big deal, you can just change your loan amount after the fixed rate period.

              • MuddyClear on 06/11/2020 - 17:49
                -6

                @chid: No. 3 Is a big deal and you’re not understanding it at all.

                • aleayr on 06/11/2020 - 17:57

                  @MuddyClear: Err, how is it a big deal? You get a lower rate for a few years and revert to Ubank's low variable rate at the end?

                  Or you could pay the higher variable for 3 years and save nothing. Can you explain why you think others aren't understanding it?

                  Other banks, you may go to a higher variable rate, but it's normally a discussion to change to a different product with a lower rate, or you refinance away.

                  • MuddyClear on 06/11/2020 - 18:29
                    +1

                    @aleayr: Once fixed rate is over you revert to their standard variable rate, which is much higher than the introductory rate or package variable rate. Point is your loan should spend most of its time on variable rate (if you don’t want the bank to live off of you so much), so choose the right loan to start with or you will end up refinancing away.

                    No.4 You can’t redraw on fixed too.

                    • chid on 06/11/2020 - 19:07
                      +1

                      @MuddyClear: Yes but what's wrong with refinancing after the fixed period? In comparison with the variable rate we'd be basically paying ~5% more per month. I'm not sure it's worth paying that for the possibility of redraw or selling.

                      This obviously will depend on the rate of discount you get on standard variable but ultimately you're paying more for flexibility which will make sense if you need it, if you don't you're better off with fixed.

                      • MuddyClear on 06/11/2020 - 19:30
                        +2

                        @chid: The flexibility to make additional repayments to pay off your loan sooner is where the real saving is.

                        • chid on 06/11/2020 - 19:32

                          @MuddyClear: Here's to that. In that case you can split your loan and have an offset on your variable portion.

                          • MuddyClear on 06/11/2020 - 19:43

                            @chid: Same problem. Once split is over the entire loan reverts to the much higher standard variable rate.

                            • chid on 07/11/2020 - 00:38
                              +1

                              @MuddyClear: so you refinance and you'll be the same as your friendly guy on variable :)

                            • Powls on 17/11/2020 - 18:41

                              @MuddyClear: But the standard variable is 2.34%. Ubank confirmed with me that is the rate you refer to (factoring any change).

                            • Hamlet on 29/11/2020 - 09:09

                              @MuddyClear: Wait… so after the fixed period, your variable rate will be higher than everyone else's variable rate?!

                              • MuddyClear on 29/11/2020 - 11:09

                                @Hamlet: Correct. You would need to call them to request a lower rate, which they may argue its still good compared to their “comparison” rate.

        • Jake D on 06/11/2020 - 18:20
          +1

          or refi

    • goingDHfast on 07/11/2020 - 12:48

      There's a fair bit of anti fixed-rates urban mythology floating around FYI:
      https://www.reddit.com/r/AusFinance/comments/jpdr7d/fixed_ra…

  • Powls on 06/11/2020 - 15:56
    +5

    I definitely recommend UBank. Always been great for me.

  • iShibby on 06/11/2020 - 15:57
    +2

    I have my savings with UBank always had great customer service

    • Jake D on 06/11/2020 - 18:21

      I have had the opposite experience.

      • iShibby on 07/11/2020 - 13:00
        +1

        Cool cool cool

  • chathy on 06/11/2020 - 16:17
    +2

    Their rates are good but I didn't have a good experience for my home loan application.

  • roozmik on 06/11/2020 - 16:22
    +3

    i have my home loan with them. they were very very thorough which is understandable, but a bit annoying to be honest.
    but once its all setup, its all good.

    had to explain how much we ate out, or why once our eat out dining bill was hundreds of dollars (we paid on card and friends paid us in cash), etc.

    • bio on 06/11/2020 - 16:26
      +2

      That's a bit invasive.

      • Bargain Slut on 06/11/2020 - 16:33
        +5

        that's a bit intelligent if you're about to loan somebody several times their annual income.

        • bio on 06/11/2020 - 18:20

          I don't know. I was never asked such questions for a home loan application.

        • Jake D on 06/11/2020 - 18:24

          It's un-necessary. They can base their decisions on income vs outgoings without needing to pry into WHY you spend your money how you do.

          Also, they only offer refinance, so they could easily base their lending decisions on how well you make your current loan payments, regardless of what you spend the rest of your money on.

          • Bargain Slut on 06/11/2020 - 18:29
            -2

            @Jake D: I hope that you don't work for any of the banks I have invested in.

            • daclaw on 06/11/2020 - 19:44

              @Bargain Slut: Who would be investing in banks with shrinking margins and soon to be escalating bad debts? :s

            • 1st-Amendment on 08/11/2020 - 07:18

              @Bargain Slut: Do you work for U Bank?
              Credit is a risk, and risk is usually measured based on history. There's no reason that a bank needs to know what you do with you disposable income if you have a suitable credit history.

              • Bargain Slut on 09/11/2020 - 08:33

                @1st-Amendment: Negative - I did work in insolvency and bankruptcy for 6 years and now work in credit analytics and distressed debt - but I'm also a random guy on the internet and probably have no understanding of what I'm talking about.

  • CyberMurning on 06/11/2020 - 16:33

    investment loan rates?

    • Ghost47 on 06/11/2020 - 16:39
      +2

      Just use this and pretend you are living in it.

      • CyberMurning on 06/11/2020 - 16:58
        +2

        we are not ghost we human we are afraid in lying to banks

        • Ghost47 on 06/11/2020 - 19:36

          Don't be ghosts be human I believe in you.

    • [Deactivated] on 06/11/2020 - 16:48

      Their current Investor variable loan rate is 2.89%, so with the 0.15% rate cut I'm assuming it'll be 2.74 from 29 November 2020.

  • life is suffering on 06/11/2020 - 16:45

    how is it for first home buyers?

    • DrRalph on 06/11/2020 - 16:56

      Nope.

    • Jake D on 06/11/2020 - 18:24
      -1

      Refinance only.

    • SgtGrumbles on 06/11/2020 - 18:45

      It was OK for me. Plenty of processes that are a bit shonky but overall what they deliver is competent. So any issues or gaps are followed through by humans.
      Gotta be a simple loan, and it won't be anywhere near as easy as going through a broker.
      I'm happy with the overall product that's come through

  • Alanw on 06/11/2020 - 17:13

    What's the best rate for Investor home loan variable?

    • aussie-bargainz on 06/11/2020 - 17:14
      -2

      What did your research find?

      • Alanw on 06/11/2020 - 17:23

        Looks like 2.69 with ING?

        • chid on 06/11/2020 - 17:34

          I haven't done a look but I'm on lower with ANZ. Their website currently says 2.49%

    • Ckanna on 06/11/2020 - 19:30

      2.50% interest only variable rate with Bendigo bank. ( that’s what I am currently on)

  • Sidog on 06/11/2020 - 18:01

    Does the 3 year fixed rate being lower the the variable rate mean Banks think interest rates are likely to keep getting lower?

    Also I have around 11 months left on a fixed rate loan, should I contact my bank and see if they'll do me a deal or just wait to refinance in 11 months.

    • aleayr on 06/11/2020 - 18:13
      +3

      Not really. That's the period the RBA is giving the banks cheap funds. Conventional wisdom of fixed vs variable and the future doesn't really correlate in this environment.

      As for your loan, likely you'll need to pay the break fees to change your rate, so get the cost and weight it up over what you'll save with a lower rate over the 11 months (and possibly if you could snag a refinance to other lender with a cashback to cover it).

  • serpserpserp on 06/11/2020 - 18:20

    Anyone got an easy breakcosts calculator they could share? Need to see if the difference between rates over 3 or 4 years will cover the cost.

    • Ckanna on 06/11/2020 - 19:32

      It changes everyday and depends on bank. That’s what I have been told by my previous bank when I switched over from their fixed term loan

      • serpserpserp on 06/11/2020 - 22:58
        +1

        It does change every day. But you can get a fairly close guess. Probably just quicker if I rang the bank though.

  • gviddy on 06/11/2020 - 18:35

    Lock it in Eddy.

  • Hendrix on 06/11/2020 - 18:37
    +2

    The banks always say they can't pass on rate cuts, but then they offer special low rates to attract new customers. I am going to wait a little while because I think there will be some good refinance deals for new customers only, from the banks that apparently pass on this latest cut. Its like every other bill they slowly sneak up the cost and you need to keep on checking the marker for better deals

    • RocketSwitch on 06/11/2020 - 19:40
      +1

      Me too, I reckon there's going to be better deals soon.

  • shallylowe on 06/11/2020 - 21:14

    had a poor experience with my refinance application with ubank, might have been the mobile lender that was working on the application that was slow and had no grasp of their policy. did all the paperwork and credit checks and at the very last stage, advised they couldn't refi the loan and needed me to put in an enormous deposit. waste of time

  • financialminimalism on 06/11/2020 - 21:23
    +3

    Great to have the full rate cut. But does it annoy anyone else they sit on it for a month and cream that extra profit whilst also screwing savers by dropping their save rate first.
    Why can’t they just be nice and pass on the savings to us when they get them.

    • zzzsianzzz on 07/11/2020 - 10:07

      cream for banks to buy more cartier watches for staff.. ;)

    • 1st-Amendment on 07/11/2020 - 18:15

      Why can't you be nice and give me all of your money? Same reason…

  • atlinus on 06/11/2020 - 23:32

    Homeloans.com.au better than this?

  • ihbh on 07/11/2020 - 09:30
    +1

    They gave a $2014 GC in 2014 for each loan refinanced!

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