UBank 3-year fixed rate loan (owner-occupier, principal and interest)

Rate: 1.75% fixed for 3 years (2.22% comparison rate)

Fees: $0

Fine print: rates are for new customers who apply by Feb 26, and settle their loan within 90 days.

The average owner-occupier refinancing to this rate could potentially save $4,961 in the first year and $15,244 over the 3-year fixed term.

Cost of $400K home loan (interest plus fees)

Notes: based on an owner occupier paying principal and interest with a $400K loan balance, switching lenders five years into a 30 year loan. Includes fees with the exception of govt fees.

UBank has also cut its other fixed rates by up to 0.35 per cent for new customers.

RateCity.com.au data shows there are now 53 lenders offering at least one fixed or variable rate under 2 per cent on over 120 different home loans.

RateCity.com.au research director Sally Tindall said while the RBA was set to keep rates on hold, competition between lenders was still driving home loan rates down.

“Lenders have been offering home loan rates under 2 per cent since June last year, yet thousands of existing mortgage holders seem content with the idea of paying a rate starting with a '3',” she said.

“UBank's decision to offer a market-leading rate for just over a month is designed to get people to act.

“Putting an expiry date on this deal could help combat complacency among mortgage holders.

“Mortgage holders suffering from inertia are likely to be getting fleeced,” she said.

While the majority of sub-2 per cent rates are fixed, customers should think carefully about whether to lock in their rate.

“Fixed rates are typically less flexible than variable ones, so if you want access to an offset account and unlimited repayments, you might look at splitting your loan or consider a variable rate loan,” she said.

Lowest fixed rates on RateCity.com.au

Lowest variable rates on RateCity.com.au

Note: Above rates are for owner-occupiers paying principal and interest with a loan-to-value ratio of 60% or less.