Heartland Bank slices its fixed home loan rates with big cuts to all terms, opening up a big differences to main bank rates

Challenger bank Heartland updated its website Thursday morning with substantial reductions to its fixed rate home loans.

Heartland Bank now offers the market-leading fixed rates across all banks for one to five years.

Its new one year fixed rate is 6.69%, down -30 basis points (bps). Its 18 month rate is also down -30 bps to 6.59%.

Its two year fixed rate has been cut -40 bps to 6.45%.

And Heartland's three year fixed rate is down -46 bps to 6.19%.

As a result, Heartland is now offering one year fixed rates -66 bps lower than any main bank, -44 bps below any main bank two year rate, and -46 bps lower than three year rates. These are now big advantages.

The last time we had a carded, or advertised, rate below 6.19% for any term was in September 2023, also from Heartland.

Heartland has not changed any term deposit offer rates at this time.

Wholesale swap rates have recently ticked higher, helped along by market sentiment that sees a rising chance the Reserve Bank's Official Cash Rate might rise at the end of the month. Global pressures are also at play.

Obviously you should negotiate and shop around, although you should note that the Heartland rates are "online only" so there is probably little chance to move them. Most banks will discount their carded home loan rates if you have strong financials. You shouldn't need them but if you are uncomfortable negotiating, a broker can often be helpful. But be aware some brokers won't offer you the best over the whole market, only the banks they have approved connections to in their "lending panel." And clearly bank mobile managers are there to pitch their company's own product.

They may even offer savers higher than carded rate offers.

One useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is below. (Term deposit rates can be assessed using this calculator).

And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options. But break fees should be minimal in a rising market. They will become important in a falling market however.

Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment.

Fixed, below 80% LVR	6 mths	1 yr	18 mth	2 yrs	3 yrs	4 yrs	5 yrs
as at February 8, 2024	%	%	%	%	%	%	%
ANZ	7.35	7.39	7.15	6.89	6.75	7.34	7.34
	7.39	7.39	7.15	6.89	6.65	6.55	6.55
	7.39	7.35	7.15	6.89	6.79	6.75	6.75
	7.39	7.35		6.89	6.75	6.69	6.59
	7.39	7.39	7.15	6.89	6.75	6.69	6.49
Bank of China		7.09	6.99	6.89	6.79	6.69	6.59
China Construction Bank	7.19	7.09	6.89	6.75	6.49	6.40	6.40
Co-operative Bank	7.39	7.35	7.15	6.89	6.75	6.75	6.75
Heartland Bank		6.69 -0.30	6.59 -0.30	6.45 -0.40	6.19 -0.46
ICBC	7.19	7.05	6.95	6.85	6.59	6.49	6.49
	7.45	7.45	7.25	6.95	6.79	6.69	6.59
	7.39	7.39	7.19	6.75	6.75	6.79	6.79