The digital bank, developed and owned by NAB, now offers fixed rates as low as 5.79% p.a. and variable rates from 6.09% p.a.

It comes nearly six weeks after NAB revealed it had cut rates on many of its fixed rate home loan products to as low as 5.99% p.a.

Westpac and CommBank soon followed suit, with the latter big four bank simultaneously dropping variable rates on some mortgage products.

Tuesday's cuts see headline interest rates advertised on ubank's premium Flex variable home loan product inline with those on its basic Neat variable home loan product.

Ubank's Flex offering promises access to an offset account, while the Neat product comes with no annual fees.

The downwards movement represents "an effort to help customers get ahead with the right home loan, whether they're first time buyers or seasoned investors," the bank said.

Variable rate cuts for owner-occupiers

Interest rate changes made to the bank's variable rate Flex lineup for owner-occupiers making principal and interest repayments are as follows:

Product LVR Change New rate (p.a.) Comparison rate* (p.a.)
Flex Variable <60% -5bp 6.09% 6.33%
Flex Variable 60-80% -5bp 6.14% 6.38%
Flex Variable 80-85% -10bp 6.64% 6.88%

Unlike the majority of lenders on the market, ubank doesn't offer home loans to borrowers with deposits worth less than 15% of their property's value meaning those with loan-to-value ratios (LVRs) of more than 85% can't borrow from the bank.

However, it also doesn't ask any borrower to pay for Lenders Mortgage Insurance (LMI), so a person with an LVR of between 80% and 85% might find ubank a compelling proposition.

See also: How to avoid paying LMI

Variable rate cuts for investors

Ubank also cut variable rates on offer to property investors, with its Flex home loan lineup now advertising these rates:

Product LVR Change New rate (p.a.) Comparison rate* (p.a.)
Investment Flex Variable P&I <60% -5bp 6.24% 6.48%
Investment Flex Variable P&I 60-80% -5bp 6.29% 6.53%
Investment Flex Variable IO <60% -10bp 6.54% 6.59%
Investment Flex Variable IO 60-80% -5bp 6.64% 6.66%

Fixed rate cuts revealed by ubank

Fixed rates have been on the nose with Aussie borrowers in recent years - less than 3% of home loans signed in June had a fixed rate of interest.

But lenders' advertised fixed rates are generally worth keeping an eye on, whether or not you're in the market for a fixed rate mortgage.

Banks and lenders tend to price fixed rates in a way they expect will remain profitable for the foreseeable future.

When a lender sets fixed rates lower than variable rates, it's a good sign it expects the cash rate to fall in the not-so-distant future.

The opposite might be true if its fixed rates are higher than its variable offerings.

NAB is the most bearish of the big four banks on the prospect of a cash rate cut.

It's tipping the Reserve Bank of Australia (RBA) board to hold the cash rate at its current level until May 2025, thereby keeping interest rates charged to borrowers high until then.

Westpac and ANZ, meanwhile, are forecasting a February 2025 cut, while CommBank is even more optimistic in predicting a November 2024 cut.

With that in mind, here are the changes that NAB's ubank made to its advertised fixed rates (for owner-occupiers making principal and interest repayments) on Tuesday:

Fixed term LVR Change New rate (p.a.) Comparison rate* (p.a.)
One year ≤60% -40bp 5.99% 6.32%
60-80% -40bp 5.99% 6.37%
80-85% -73bp 6.25% 6.83%
Two years ≤60% -30bp 5.79% 6.27%
60-80% -30bp 5.79% 6.31%
80-85% -55bp 6.29% 6.81%
Three years ≤60% -20bp 5.79% 6.25%
60-80% -20bp 5.79% 6.28%
80-85% -55bp 6.29% 6.77%
Five years ≤60% -40bp 5.79% 6.20%
60-80% -40bp 5.79% 6.23%
80-85% -69bp 6.29% 6.72%

Ubank demystifying the home loan process 

Ubank also released new research on Tuesday, finding young Australians are still lazer-focused on entering the property market.

Despite interest rates being at 12-year highs and house prices reaching unprecedented levels, nine in ten Millennials and Gen Zs who don't own a home consider climbing onto the property ladder to be one of their life's ambitions.

However, confusing jargon and the complexity of buying a home and securing a home loan are significant barriers.

"We understand that the process can be stressful, and that's why we're using technology to make home lending fast, simple, and easy and partnering with individuals and organisations to demystify the home buying journey," ubank chief home lending officer Kanishka Raja said.

The bank has created a suite of educational content and guides for first home buyers and is partnering with the Ladies Finance Club in October for a national roadshow to inform hopeful-  homebuyers on the home-buying process.


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Update resultsUpdate
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, min10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Dedicated loan specialist throughout the loan application.
Disclosure
5.99% p.a.
5.90% p.a.
$2,995
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender.
  • Backed by the Commonwealth Bank.
Disclosure
6.14% p.a.
6.16% p.a.
$3,043
Principal & Interest
Variable
$0
$350
60%
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 .

Important Information and Comparison Rate Warning

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