Bank of Queensland (BOQ) cut the rate on its Economy Variable home loan to 2.69% p.a. on Wednesday (2.86% p.a. comparison rate*).

The rate is available to new borrowers only, with a maximum LVR (loan to value ratio) of 70%, and is a discount of 63 basis points on BOQ's regular variable rate. 

BOQ's subsidiary, Virgin Money, also reduced rates on its variable rate home loan by 20 basis points to 2.60% p.a. (2.77% p.a. comparison rate), the lowest mortgage rate ever offered by a BOQ entity. 

The rate is only available to new customers borrowing more than $500,000 who have a minimum deposit of 40%. 

Both mortgages come with redraw facilities and allow unlimited additional repayments. 

To further lure new customers in, Virgin Money has offered $2,500 cashback when refinancing, up from $500 previously. 

BOQ was reached out to for comment regarding the cuts. 

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Update resultsUpdate
Filters
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
6.04% p.a.
6.06% p.a.
$3,011
Principal & Interest
Variable
$0
$530
90%
4.6 Star Customer Ratings
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Quick and easy online application process.
Disclosure
5.99% p.a.
5.90% p.a.
$2,995
Principal & Interest
Variable
$0
$0
80%
Apply in minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
 Disclosure
6.09% p.a.
6.11% p.a.
$3,027
Principal & Interest
Variable
$0
$250
60%
  • No annual fees – None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
 Disclosure
5.69% p.a.
6.16% p.a.
$2,899
Principal & Interest
Fixed
$0
$530
90%
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Flexibility to split your loan with both fixed and variable rates
 Disclosure
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

The cuts are clearly aimed at expanding BOQ's mortgage book, which according to the Australian Prudential Regulation Authority (APRA), contracted by $1.35 billion to $28.7 billion in the last four years.

In contrast, during the same period Macquarie and ING expanded their loan books by $20 billion and $13 billion respectively. 

BOQ last made cuts to variable home loan rates in early April in response to the Reserve Bank of Australia's (RBA) first March cash rate cut, announcing it would cut owner-occupier rates by 17 basis points and investor rates by 25 points. 

BOQ and Virgin Money's cuts come shortly after Macquarie made a wide range of cuts last week to both owner-occupier and investment loans.

Macquarie made a 5 basis point cut to its Basic Variable Owner Occupied P&I 60 rate, taking it 2.64% p.a. (2.64% p.a. comparison rate*). 

For investors, Macquarie cut its Basic Variable Investment P&I 60 by 10 basis points to 2.89% p.a. (2.89% p.a. comparison rate*).

Variable rate cuts have been few and far between since the flurry of activity following the RBA's emergency second cash rate cut in March. 

With the central bank announcing the cash rate was at its effective floor at 0.25% and lenders' margins squeezed historically tight due to the COVID-19 induced recession, there is little room for movement on interest rates. 

Instead, lenders have been making numerous cuts to fixed rates, with many of these rates far more competitive than their variable cousins. 

One of the lowest on the market is ING's Orange Advantage Residential 2-year fixed loan which was cut to 2.09% p.a in March (3.77% p,a comparison rate*).



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