Best of the Best 2017: Cheapest Home Loans


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Interest rates are the lowest in memory, leaving home buyers well placed to scoop a great deal. As our winners show, if you're paying more than 4% on your home loan you're being ripped off.

In the non-bank category, Queensland-based Reduce Home Loans has picked up the top award for cheapest home loan the second year in a row. The Rate Buster permits unlimited extra repayments and redraw, and borrowers who maintain a good repayment record may be eligible for a discount after five years. You will need a 20% deposit.

If that's a challenge, our second placegetter, Reduce's Rate Buster 100% Offset loan, could be the solution.

The maximum lend is 90% of your property's value, though a loading of 0.25% applies for borrowings between 80% and 90%. Still the Rate Buster 100% Offset loan remains a low-cost option for home buyers with a 10% deposit.


Among the banks, UBank, NAB's online lender, maintains its track record for red-hot deals, having taken out this award for five consecutive years.

Along with a low rate, borrowers enjoy the flexibility of unlimited extra repayments plus redraw ($1000 minimum each time), and a 0.10%pa loyalty discount may be applied if you keep up a healthy repayment record for three consecutive years.

Choose weekly, fortnightly or monthly repayments, and if you can't decide between a fixed or variable rate, there's a split loan option. Borrowers need to be PAYG employees and have a minimum deposit of 80% to apply for the UBank loan.

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February 19, 2017 7.24am

Lots of customers online complaining about Reduce Home Loans putting up their rate after a few months.

February 20, 2017 9.06am

Hi LKLad,

Our methodology also takes into account historical rates. It is unfortunate that Reduce Home Loans have increased their rates, but many lenders have done the same.

- Money team

Renate and Ian Knight
June 27, 2017 9.00am

Does your bank deal with ex bankrupt customers? We finalised bankruptcy in August 2016.
Looking for a loan of $360,000. Deposit of 20 per cent.

June 27, 2017 9.27am

Hi Renate and Ian,

Please contact the lenders directly to ask about your loan eligibility. You can phone UBank on 13 30 80 or Reduce Home Loans on 1300 733 823 .

- Money team

October 22, 2017 10.24am

Please let your readers know that UBank will only lend to PAYG wage earners. They will not lend to self employed.
Also, if you ore over 40 then they still have a 30 year term but need an exit strategy. That would scare me as an over 55 year old.

October 23, 2017 3.31pm

Hi Linda,

You're correct that UBank only lends to PAYG earners.

The exit strategy is common due to providers having to meet their responsible lending requirements - more and more providers will look to ensure that customers have a way to pay for a 30-year loan term if the term of the loan ends after an average person finishes working.

- Money team