The top home loans currently on the market

GUEST OBSERVATION

Melbourne Cup day is the race that stops the nation and in 2014 this is true in more ways than one.

Almost half the cash rate announcements made on Melbourne Cup day in the last 20 years have seen a rate move so all eyes were on the Reserve Bank board meeting. The 33 experts in the finder.com.au RBA survey weren’t surprised however, when the Reserve Bank left the cash rate on hold for another month.

Despite all 33 experts betting on no move, some lenders were shaking up the market by changing their rates. Over the past month we saw 18 variable rate home loans move their rates – 13 of which were cuts. There were also 16 three-year fixed rates that saw rate moves, nine of which were hikes.

This shows that although the cash rate is a fairly good indicator of rate stability, it’s not doesn’t mean that home loans will stay put. With 32 of the 33 expert’s in the cash rate survey predicting an incoming cash rate rise, the time is nigh to consider or revise your home loan options – both fixed and variable. Comparing home loans to refinance, or enter the property market, are some effective ways to make sure that, regardless of the incoming rate rise you’re still on top of the ever-changing rate market.

finder.com.au’s top variable rate home loans:

1. loans.com.au Dream Home Loan - : 4.48% per annum
   
   Minimal fees as well as flexible features are two key safety buffers that can minimise the impact of changing rates – these are all things that this loan contains. This loan also minimises upfront fees, such as application, annual and legal fees. It is important to know that an early termination fee does apply to this loan, which can sting for those repayment overachievers.
   
   This is the lowest variable rate loan currently on finder.com.au and also a loan that gives you a 100% offset account and redraw facility – meaning if you do overshoot on a repayment, you can take it back later.
    
2.  UBank UHomeloan: 4.54% per annum
   
   This loan from UBank comes with no application fees, legal fees, valuation fees, annual fees, settlement fees or exit fees. It’s available for purchasing, refinancing or investing on amounts between $100,000 to $1,000,000.
   
   While this allows for a measure of flexibility, this particular product can only be used for a maximum 80% of LVR, which means you will have to save the remaining 20% deposit before applying.
    
3. Newcastle Permanent Premium Plus Package Home Loan: 4.87% per annum
   
   This package loan has two limited time offers that are worth considering. If you apply for a loan of $150,000 or more before December 19, 2014, you’ll receive $1,000 cashback.
   
   Newcastle Permanent also has a limited time offer where any loan will be eligible for the Tier 4 discounted rate, which is usually only reserved for combined loan balances of over $900,000. This loan is part of the premium plus package, so you will need to open other products from this provider, which may be an important consideration.

finder.com.au’s three lowest three year fixed rates:

1. Newcastle Permanent Fixed Rate Home Loan: 4.49% per annum
   
   Newcastle Permanent also has a competitive fixed rate loan option available – in fact, it’s the most competitive fixed rate on finder.com.au right now.
   
   You’re able to lock in this low rate for three years and enjoy $1,000 cashback when you apply for a loan of $150,000 or more by 19 December 2014. While the establishment fee is waived, you’ll still be obligated to pay $375 annual fee if you take out this loan.
    
2. ME Bank Standard Fixed Rate Home Loan: 4.59% per annum
   
   You won’t have to pay any application or account-keeping fees with this loan, meaning a saving both at the onset and during the life of your loan.
   
   However, while you can borrow up to 95% of your property’s value, access a redraw facility and a split loan option, you will be obligated to pay $200 at the beginning and end of this loan – in the form of a valuation and exit fee.
   
   
3. Greater Building Society Ultimate Fixed Rate Home Loan:4.59% per annum
   
   This package gives you discounted access to a range of Greater’s products, including their fixed rate home loan, Visa credit card, and transaction account. You’ll pay one annual fee for all your products while locking in a competitive rate for three years.
   
   With fees totalling $455, you may want to make sure the full range of Greater discounts available to you will be of maximum value.

The cash rate remains at its historical low of 2.50% for now, however you shouldn’t ‘set and forget’ your home loan on this basis. Compare these and other home loan options and see if you can benefit from refinancing – if you’re new to the property market, make sure you take advantage of the best products available to you. 

Michelle Hutchison is the money expert for finder.com.au, one of the biggest online comparison networks in Australia.