Barefoot Investor Scott Pape wants to help you save money in every aspect of your life, including your home loan.
And with the Reserve Bank of Australia cutting the official interest rate to a historic low of 1.25 per cent, each of the big four banks have responded differently.
While all home loan borrowers set to pay less for their mortgage, only CBA and NAB is passing on the full 0.25 per cent rate cut to mortgage borrowers; Westpac passing on 0.2 per cent and ANZ is passing on 0.18 per cent.
But the big banks aren’t the only ones on the market: there are other, smaller or lesser-known lenders with way better deals for customers, Pape pointed out in an email to his subscribers.
First, his advice is to stay on a variable home loan, “and screwing down the cheapest rate you can”, he said.
According to the money guru, there are four great – and cheap – home loans on the market this month.
“According to my fiercely independent research, the cheapest variable mortgage is Reduce Home Loans at 3.09 per cent (or 3.19 per cent with an offset account),” Pape said.
“Reduce Home Loans, by the way, is actually a white-labelled (rebadged) loan from the Bendigo Bank.
“Let’s spare a thought for Bendigo’s head of marketing, who just spat out his morning coffee at having this revealed in the paper.”
Other cheap alternatives include ‘fintech’ firms TicToc’s 3.27 per cent, Loans.com.au at 3.28 per cent, and Athena at 3.34 per cent, he said.
But Pape added: “These rates are generally only for eligible borrowers.”
“Think of it like striking up a conversation with a hottie at a bar. Unless you’re a good catch ‒ more than a 20 per cent deposit or equity, a stable job and all your teeth ‒ they won’t even look at you.”
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