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There's a new way to get a discount on your home loan rate

Photo: Torsten Blackwood/ AFP/ Getty Images

The RBA is set to keep interest rates on hold for the 27th month in a row tomorrow, but some lenders are taking matters into their own hands.

Reduce Home Loans is offering new customers discounts of up to 5 basis points for the next three days, bringing their lowest rate down to a market-leading 3.39 per cent.

By contrast, the average discounted variable rate of the big four banks is 4.55 per cent, according to the Reserve Bank of Australia.

That difference of 1.16 percentage points would equate to savings of $224 per month for a $350,000, 25-year mortgage, according to comparison site RateCity.com.au.

The offer is available to people with good to excellent credit scores.

Paul Marshall, CEO of RateCity.com.au, who is hosting the special on their site, said the offer was unique, in that it tied a benefit to one of the decision points lenders use in determining risk, being the credit score.

“People with a good credit history can potentially unlock these discounted home loan rates. For those that don’t yet qualify, a proactive approach to improving their credit score should benefit them into the future,” he said.

“Now that comprehensive credit reporting has taken affect, it’s only a matter of time before other lenders follow the lead of Reduce Home Loans by offering special discounts to borrowers with better credit scores.”

Reduce is not the only lender to recently cut rates for new customers.

HSBC, Commonwealth Bank and Westpac have all cut their basic rates in a bid to get new customers in the door.

See what your credit score is here >>

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