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UBank Home Loan 1.99% Variable and Comparison Rate, 80% LVR (Limited Time for New Customers / Call for Existing Customers)


UBANK have a new interest rate for a limited time of 1.99%, supposedly for new customers, but I just called there 13 line and asked to be transferred across, no problems, 5 minute call, and should be backdated to today, but processed in a few weeks.

  • Unlimited free extra repayments
  • Flexibility to redraw additional payments for free
  • No ongoing monthly service fee

Doesn't seem as good as the HSBC deal (with the cashback), but for those already with Ubank - its easy enough to call and get them to change it over. - also note the HSBC deal is 70%LVR and only 0.01 difference in comparison rate
(also for anyone who would prefer to deal with ubank)

13 30 80, between the hours of 9:30am and 5pm Monday to Friday

Variable and Comparison rate
Owner Occupier P&I Loans up to 80% LVR

Referral Links

Referral: random (526)

Referrer and referee each receive $20 after referee makes 3 transactions within 30 days. Offer valid to 30 June 2022.

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closed Comments

  • Presume this is for owner occupied home loans and not on investment loans or interest rate on savings accounts? You should clarify…

    • +3

      Yep, I added that to the end, as you where typing this :)

  • +1

    Why anybody would go for an owner occupier home loan without an offset facility boggles my mind (assuming your home loan is approx. 30% of your income as recommended). You would be easily saving more money by reducing the interest payment through offset (and having a competitive interest rate too of course!)…

    • +14

      You could just pay your excess funds into the mortgage and then redraw if required later?

      EDIT: or if you want to have instant access - open a savings account with them and keep a few $k in it for emergencies. Yes it won't offset your mortgage but if its only $2k it'll only 'cost' you $39.80 (in foregone interest savings) to do this.

    • +5

      It has redraw. To me, in principle it's the same as having a high interest saving account and a transaction account. Just shuffle money in an out as you need to

      • +12

        Correct, unless there’s any possibility that your property will become an investment property during the life of the loan.

        “There may be different tax implications with using your redraw feature and offset account if you decide to rent out your home in the future. If you decide to rent out your home as an investment property, the interest charged on the loan may be tax deductible. But you may not be able to claim any portion of the loan you have redrawn from your redraw facility for non-investment purposes like a holiday or a private car.”
        Source: https://www.anz.com.au/personal/home-loans/tips-and-guides/d...

        I thought better to quote than to type out the explanation. Basically, this will create a huge headache later on when you’ll need to retrospectively determine the purpose of each redraw.

        • The other thing to be aware of is that there are usually clauses in contracts where the bank can essentially take some or all of your redraw balance to pay down the loan or restrict your ability to redraw your money. This occurred to many people during the start of covid (ME bank as one example).

          I also recently had an investment loan where the bank closed the loan because I had put 100% of the loan balance into the redraw for a short period. This would not have happened if it was via offset.

    • +13

      i just chuck everything on my homeloan, live off the credit card for a month and pay it off at the end of the month… free money.

      no offset fees, have a few grand extra in the homeloan at any given time.
      so ends up being 5-10K cheaper over the life of the loan with interest, let alone offset fees.

      easy enough to withdraw only problem with UBANK redraws is they take a day or two to get to your bank account.

      • +6

        Redraw affects tax implications while offset doesn't if you ever plan to rent your place out in the future

        • Sorry, I accidentally down voted your comment when I wanted to upvote it. I can't seem to change it now.

          Your comment sums it up well, from my understanding. Offsets can come later through refinancing for those that do have an investment down the track, they really aren't necessary for the owner occupier.

    • Are offsets just being phased out by many banks? I know that our offset with CBA is a "legacy" account and not available to new loans (particularly that it applies an offset to a fixed loan too)
      Since there's a bunch of "redraw" comments above, these aren't really equivalent since the bank can often 'neutralise' the redraw amount (and therefore it's not available)?

      • +2

        Don't think so, ANZ have 1yr fixed with offset which I locked in at 1.99% on the bf package ($395pa).

      • Currently moving across to Bank Australia and can have multiple offsets on a fixed rate loan.

      • Offsets will never become obsolete for as long as the ATO considers the loan can become contaminated by using redraw and therefore make your life hard if you ever want to convert your home to an investment property down the track.

      • They are becoming rarer as they are seen as more expensive but they are cheaper if you plan to pay extra generally and most definitely if your home ever will become an investment property in the future.

        Banks always win it seems from the comments which seem to think redraw is the same - if you are indeed paying lots off your home loan.

        • Since I make more on other investments, I invest all my spare coins except a few grand. No point having offset saving me 2% when I can make 15-30%.

          I’d say most people are living in their forever home, or at least with no intent to make an investment.

          • +2

            @onlinepred: Do share how your returning making 30%!

            • +1

              @odje: 2019 bought VESG. Also bought VDHG. Put all our holiday money and offset money into them. Wish I did it earlier hey.

              • @onlinepred: Except that firstly you had a risk involved with your investment.

                Secondly, you'll pay capital gains when you sell the ETFs, but no tax on the savings made on your offset account.

                Not saying ETFs aren't great and shouldn't be interested in, but they suit a different requirement to an offset account.

                • @kulprit: Yes it’s true, but if you do like money, and are not going to pay off your loan in the next few years, a diversified etf will mean you make money and pay cgt rather than limiting losses through offset.

                  There is risk in home loans too btw. What if interest rates increase or the value of your property decreases etc. buying a house is a risk.

          • @onlinepred: Where are you making 15-30%?

            • @Dr Rag: I believe he is talking about cryptocurrency, Investment properties, passive income etc

        • Banks always win it seems…

          Well if they have provided a service that allowed you to buy your own home then you win too. This is the whole concept of free trade that a lot of people don't seem to understand. You enter into an agreement with someone to get something you want, in exchange for something that the other party wants, and therefore you are both getting what you want. ie win-win.

    • +2

      It comes with free redraw so I put all my savings in the mortgage. It's a hassle but I guess I'm not a big spender, and I charge most of my spending on credit card anyway.

      • Hmmm have you all been bamboozled (misinformed)? It is not even close to the same.

        Offset is liquid like you have paid from when the money drops in your account and does not need to go into the home loan at all. You can save for something else and reduce your interest.

        Redraw you have to pay into the loan itself but the bank can also change the amount available for redraw, such as when you are refinancing (take your savings). It is a risky proposition to save into a home loan… and you cannot redraw from an investment home loan account without taxation implications in most cases (speak to your accountant on these matters before redrawing if it applies).

        • +11

          I never said it's the same. Based on my current financial situation, I don't need an offset account, which often comes with a higher price tag. And clearly I don't have an investment property :D

          • @makeorbreak: Yep sorry not you specifically but everybody in the chain who is like redraw is pretty much the same and I would note while you don’t have an investment for some it may become one in the future.

            • +1

              @frugal investigator: For an owner occupier loan redraw facilities are, for all intents and purposes, the same as an in offset account.

              Whilst the bank technically can change the amount available for redraw, there is almost zero chance of this happening. Yes, ME bank did it during covid, then reversed it almost immediately due to the backlash they received.

              There is no advantage to having an offset account over a redraw facility on an owner occupier home loan, in fact its actually more expensive considering they're only usually available on "package" home loans which incur an annual fee (on average about $395).

              Investment loans are a different story but this post is about an owner occupier loan.

    • +2

      I would say because people love gambling money on crypto and stocks to make 100-200% rather than offsetting 2-3% interest.

      • +3

        I'm currently getting 8% interest P.A., paid weekly, on an AUD Stablecoin which I can convert 1:1 to Fiat immediately with no lockin period, fees or spread. Even if you didn't feel like gambling with Crypto, there's no need to when the same ecosystem offers generous rates on stablecoins.

        • I'm currently getting 12% with USDC on Crypto.com. I was a little bit concerned with the platform intially but after they signed 10 years $700 million naming rights for Lakers home court stadium, and whole bunch of other long term endorsement deals ( UFC, F1), I thought it should be a safe place to put some money in for a few years lol.

          • @argo1230: That's with the 3 month lock-in though, isn't it? I'm keeping TAUD in Flexible and I just draw upon it whenever I want to top up the card.

            • @Jonzay: yeah thats 3 month lock-in. I actually didn't know 8% TAUD in Flexible, now I will move the money currently sitting in Fiat wallet there, haha

              • @argo1230: Glad I could help! You can top up the card directly with TAUD too (once you take it back out of flexible), so no need to put it back in the Fiat wallet before loading it onto the card.

          • +2


            I was a little bit concerned with the platform initially but after they blew a tonne of money of stupid shit I thought it should be a safe place to put some money

            I hate to break it to you but this is precisely how every Ponzi scheme in history works

            Just make sure you're not the last guy holding the bag…

        • which I can convert 1:1 to Fiat immediately

          Well that's the theory. One of the problems with blockchain is that any transaction requires miners to process it. In the event of a panic event or large drop, the miners suddenly disappear or switch their resources to other more profitable coins, leaving you in the dark.

          8% return is great until your capital disappears. Then it isn't very great at all.

          • @1st-Amendment: Yes, risk mitigation is one of the reasons why I don't put my entire bank balance into the system. I just keep enough in there to not have to constantly send money from my bank account to top up the Visa card. The 8% interest is just a nice bonus.

      • +1

        Or just get roughly 10% on simple diversified and etf

    • +2

      Why anybody would go for an owner occupier home loan with the lousy interest rates and costs of many banks boggles my mind.

      Redraw is just fine!

    • +6

      I don't think its that mind boggling tbh.

      My loan has an offset, with a fee of $299 pa. And an intrest rate of 2.09%

      The savings account with the same bank has an intrest rate of 1.35%

      Considering earnings from the savings account will be taxed. Say at 32.5% for arguments sake equals an effective intrest rate of 0.91%

      Giving a beneficial rate of the offset at 1.18%.

      So to recoup the offset cost an average sum of $25,339 would need to spend a year in the offset to break even.

      Many people either do not have that amount of cash in savings, or choose not to keep that mount of cash as "cash".

      • +2

        Exactly. Unless you've got a decent amount of cash in the offset, it's not really making much of a difference.

    • +2

      Special offers aside, it is generally $200-500 more expensive a year in fees to go for a home loan with offset instead of the most basic variable rate loan.

      So you need to compare the best bank savings rate you can get without fees and restrictions (e.g. ING Savings Maximiser or whatever), say 1.35%, and work out how much money you need to keep in there to break even. For my bank currently I'm at 2.18% variable with no fees and no offset, I would need to keep like $40k in an offset to break even if the package fees were about $300 a year ($40,000 * (2.18-1.35)% = $332).

      Edit: Somebody beat me to it. I also didn't consider tax in my calcs like the above poster. But the general theory is the same.

    • +2

      The huge implication is when you want to change from owner occupier to investment loan.
      Money transferred in to the account causes the loan to be "repaid" even if you redraw it later.
      This lowers the amount you can deduct through tax as investment in future.

      Offset doesnt have this problem.
      Unfortunaty I found out the hard way…

      • If you're changing from an owner occupier loan to an investment loan, just contact your bank to open an offset account. It may require a variation application but it's not very difficult. You're not locked into the product you choose at the start of the loan (unless you're on a fixed term)

        • My comment was about the tax implication from ATO and nothing to do with adding an offset account.

    • +1

      Both form is great, for the correct investor.

      For example, it makes sense to fix a OO home @1.79% like i did, instead of having a variable rate at 2.39% (at the time) with an offset.
      The mindset is two folds

      1. % saving
      2. its silly to have money in an offset saving you 'x'% when debt is so cheap.

      Moving the money in ETF's alone has given me more.

      For ex, if you borrow 1m, interest at 2.39 is $23,900
      ETF's made me ~ 6k already lol think about it: for a very small 'sum of cash'

      Let alone if you diversify your portfolio with the 'cash' and play crypto etc on top if thats your jam.

      Every package is tailored to the investor. Every package makes sense. I also have an offset account on of my other loans as well - again for a different purpose.

      Fix - More aggressive mind set
      Offset - Less aggressive mind set

      So yes, nothing mind boggling about it - and sorry if my maths is off, on the phone!

      • -1

        Your math is fine. I was not talking about investing, offset vs investing is another topic, but good you point it out.

        My point is offset is superior to redraw generally (not in all circumstances but for those who want to pay down their home loan), and banks charge slightly higher interest rates on these products as they get less money (from interest) for those who use them.

        • Each to their own, depends on your position. I wouldn't ever offset in this market was my point as you were not referring to redraws, but yes redraws are easier.

    • Unless you have an offset account balance of many thousands you will not offset the extra interest or fees in the product with the offset. You will ALWAYS find cheaper without offset due to the current rules banks need to follow for reserving capital and liquid assets for offset accounts.

      If you are too lazy to move stuff around in redraw then yeah offset but it is not the OZbargain way.

      This doesnt apply at all to investor loans.

  • +1

    Do they have an offset option?

    • +1

      No only redraw. Similar but not the same.

  • +1

    Thanks op, currently with them but at 2.19 ( called them 6months ago and they dropped my rwte by .15 so will try again. Was painless last time

  • +2
    • Good, but not as good with a high LVR.

    • oh nice, didn't know they had offset accounts now - thanks! :)

    • -1

      Yay Athena has offsets. Will move when our fixed period is up.

    • +2

      Just be aware, your offset balance is not covered by the Government FCS.
      Quote from Athena's FAQ:
      "Is my offset covered by the Financial Claims Scheme?
      Athena is not a bank or ADI (Authorised Deposit-taking Institution) and therefore not eligible for the FCS."

      • Thanks

      • when was the last time you heard a bank or non-bank crashed in the last two decades? and even if they did, Id assume the outstanding loan amount would be deducted with whatever money you had with them. Unless ofcourse you are holding more than what is outstanding which in any case not a wise idea :)

        • when was the last time you heard a bank or non-bank crashed in the last two decades?

          What is the GFC lol…

          The reasons Aussie banks didn't fail during GFC is due to strict ADI regulations at the time. Since then the rules have been loosened and now we have a whole swag of non-ADI products on the market. Thinking that it can never happen to you is a recipe for failure.

          • @1st-Amendment: in my case i owe a lot more than what Ive in the offset, so Id assume whoever picks up the loan book will deduct the amount. I get that there could be another GFC but probability of that is low and Im not an expert but I doubt there has been so much easing in the sector to be so vulnerable.

            • @lknight:

              so Id assume whoever picks up the loan book will deduct the amount.

              So that's the difference with an ADI, your deposits are protected somewhat by the government, so in the event of failure the government will pay you your money back (ie lower risk). With non-ADI, if the company folds, they can take your money with them, but you are still left with the debt (higher risk).

              There are pros and cons to each but don't assume that there is no risk.

              • @1st-Amendment: ok fair enough. agreed on the risk, no doubts there. Athena do however say this…their step in provider perpetual limited will assume the loan and either everything remains the same including your offset/redraw balance or the balance may be absorbed into the loan.

  • +6

    Thanks for the heads up @wisc - just saved a few grand with a straight forward 5 minute phone call!

    • +6

      thanks for the feedback, i love helping out, and love that people get use out of this.

      (Just paypal me my cut of the savings ;) )

      • +1

        Yeah same mate. Thanks for the great post. I'm a current customer, so this going to save me a few $$$…..Well for the next few months anyways till the RBA puts things up. Cheers for your time

  • -1


    • +1

      Sadly not, which was the only reason I switched away from them.

  • +1

    Done it, love it.

    Thanks wisc, just got off the phone and they said the exact same thing, will apply now and back date once it is all sorted in a few weeks.

  • +1

    What’s their two year fixed rate?

    • They don't appear to have a two year fixed rate, three year is 2.49% p.a. (1 year is 1.79% p.a.)

      • Cool. I’m getting 2.05% 3 year fixed (with unlimited offset) with Bank Australia. Although my LVR is probably below 70%.

  • +3

    Thanks OP, five minute call, free money. Stay safe people.

  • +2

    After they happily dropped my rate last time, and have done again now, i wont be leaving ubank anytime soon. Great service

  • +2

    Thanks!, they reduced it to 1.99 when I called.

  • +2

    Are they easy to call as an existing customer? What do you say, I've seen the new rate, can you hook me up?

    • +3

      Basically, call the 13 number listed above, say hey, can you please cnge me to the 1.99 rate?

      • +5

        Cheers, but in the time between I wrote that and now I'd already called them and got it sorted.

        Talk about an easy process

    • Does anyone know if they will drop the rate on the variable if you also have ongoing fixed components with them?

      • Yeah that's what they did for me, only changed the rate on my variable

  • +2

    Thanks @wisc. Also managed to get switch over to the lower rate of 1.99%. The CSR looked up my account and saw how long I've been with them (2014) so said definitely.

  • +1

    is this why their website is down? lol

  • +1

    Thank you wisc

  • +2

    Thanks, this is great, got our home loan rate reduced without any trouble

  • -2


  • +4

    Also they accept interest rate change requests through live chat, so if you don't like calling, live chat works too :)

  • Anyone knows if I can apply for owner occupied home loan at Ubank when I already have an owner occupied home loan at NAB? (I believe Ubank is part of NAB)

    • Just ring, the home loans team answer within a minute or so.

    • +1

      I was with NAB and Ubank was more than happy to take my business. This was in 2014.

  • +1

    Thanks for posting! Quick call, friendly helpful staff, easy savings!

  • +1

    Thanks OP, 5 mins phone call saved me hundreds a month :)

    • +1

      That's awesome… Hundreds is a huge amount… Can buy some luxuary items now!

  • +1

    Variable loans will be on the rise soon - Mystate (whilst applying) did;

    Variable interest rate from 2.39% to 2.29%
    Fixed 3 year from 2.39% to 2.69%
    Fixed 2 hear stayed at 2.39%

    This (in my opinion) suggests that since they're trying to get people on variable (by offering a lower price for now) and will cover their losses by going to a higher rate in the future.

    Obviously - 1.99% is great and it's a good deal, just think about the pros and cons of variable and fixed in the current market for your circumstances.

  • +1

    Best find of my ozbargaining career by far! Great staff at Ubank. Thanks OP!

  • -1

    Not sure why they are trying to generate more demand. I chatted to them recently and they seemed to be struggling with demand.

    • Pricing team may not be talking to the processing team

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