The 1.99% p.a. advertised rate (2.93% p.a comparison rate*) is for the 'The Works' packaged home loan for owner-occupiers paying principal & interest (P&I).
Borrowers get a choice of either a two-year variable introductory rate or a two-year fixed rate - the advertised and comparison rates are the same.
After the two-year intro rate ends, the home loan reverts to a rate of 2.50% p.a. (3.01% p.a. comparison rate*).
Borrowers must also pay their home loan repayments through the linked transaction account.
While both look the same on the surface, the differences between variable rates and fixed rates are explained further here.
Illawarra Credit Union is now the 11th lender in Savings.com.au's market research to introduce a sub-2% home loan.
The new rate, introduced late Thursday, comes after experts forecasted another Reserve Bank cash rate cut in October.
More to come...
See Also: The Potential $35,000 Cost of Breaking a Fixed Home Loan
Tic:Toc also reduces
Yesterday, Tic:Toc also reduced the interest rate of its 'Live-In' fixed home loan by 18 basis points, down to 2.09% p.a. (2.35% p.a. comparison rate*)
It's fixed for two years, for owner-occupiers paying P&I, with LVRs up to 90%.
Tic:Toc spokesperson Laura Osti also said it's available with a 100% offset account.
"Combine that with our 100% online process with faster turn-arounds, and our team of Australian-based experts itching to help outside of business hours, and we think this is one of the best deals in the market," she said.
"It’s not surprising there has been an increasing demand for fixed home loans – there is some very sharp fixed rate pricing at the moment, and with Covid, it makes sense Australians would want some certainty in payments during an uncertain time in our lives."
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