For the average $400,000 home loan paying down principal and interest, a rate under 2 per cent brings the cost of mortgage repayments down to less than $50 a day.
There are 50 lenders now offering a total of 126 home loan under 2 per cent, 40 per cent of the 124 lenders with at least one home loan rate starting with a ‘1’.
RateCity.com.au research director Sally Tindall said home loan rates under 2 per cent were becoming the new norm.
“At the start of this month, a rate under 2 per cent was as rare as hens’ teeth. Today, there’s well over 100 of them,” Ms Tindall said.
“Record-low interest rates have supercharged people’s borrowing power. As a result, some first home buyers are finally finding themselves in contention at open homes and auctions.”
The latest ABS lending finance figures show there was a 51 per cent increase in the number of first home buyer loans over the last year in original terms.
“The formula of record-low rates and government grants seems to have hit the sweet spot for many first home buyers. They’re finally enjoying their time in the sun,” Ms Tindall added.
“Two years ago, the lowest variable rate was 3.44 per cent. Today it’s 1.77 per cent, and it’s not just the low-cost lenders that have moved. The whole market has been forced to follow behind them.
“Just last year, owner-occupiers with a rate in the 3’s probably thought they had a cracking deal. Today, you’d be pretty mortified with that.”