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The winners and losers from banks’ discount rates

winners, losers, thumbs up, thumbs down

When it comes to discounted home loan products, some borrowers will gain the benefits but others will pay the price. 

That’s according to the latest data from comparison service RateCity. It shows there are more than 170 home loan products on the market targeting new customers, but loyal customers are likely to pay the price.

“Australians are a loyal bunch. More than three-quarters of us have home loans with a big four bank. But when it comes to your home loan, loyalty doesn’t pay,” research director at RateCity Sally Tindall said.

“Banks are hungry for new business and they are offering discounts worth hundreds, even thousands, of dollars per year to lure customers in. Six out of 10 of the biggest lenders in the country are doing it, so it’s likely that millions of variable customers are being taken for a ride.”

RateCity noted that a customer with the Base Variable Rate Home Loan paying principal and interest at NAB could be paying up to 0.48 percentage points more than a new customer today. Assuming this customer borrowed $400,000 in August 2017, they would be paying more than $110 extra a month and $1,320 a year.

Heritage Bank recently adjusted its rates to offer new borrowers a discount of up to 0.23 percentage points, while ANZ slashed the rate on its no-frills product by 0.34 percentage points for new customers.

Savers paying a variable rate are entitled to haggle, Ms Tindall added.

According to RateCity, these are the lowest ongoing variable home loan rates.



Advertised rate %

Reduce Home Loans

Rate Lovers Variable Home Loan (Amounts <$750k, LVR <80%)


Easy Street Financial Services

Standard Variable Home Loan (New Money Offer)


Homestar Finance

Variable Rate Home Loan (Principal and Interest) (Amounts <$750k, LVR <70%)


Freedom Lend

Freedom Variable Home Loan Special Offer


The winners and losers from banks’ discount rates
winners, losers, thumbs up, thumbs down
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