the mozo blog

Since the RBA rate hike announcement on Melbourne Cup day, most of the media attention has been centred around variable interest rates and the added costs to monthly mortgage repayments for Australian home owners.

But savvy borrowers who can act fast can beat rate rise pain by locking in one of the super low fixed rate home loan rates currently available from a number of smaller lenders.

Mozo’s team of rate chasers have chased down three home loan providers – Resi, Mortgageport, and AMP – offering three year fixed home loan rates under 7%.

What’s the savings?

Let’s look at a Commonwealth Bank customer paying the bank’s new standard variable rate of 7.81% on a $300,000 loan. If they switch to AMP’s Basic 3 Year Fixed Rate loan at 6.99% they could save $160 a month. Once discharge fees and introductory fees are taken into account, the customer would save $1,320 in their first year and nearly $2,000 each year after that.

In addition, there are more than 20 providers which offer three year fixed home loan rates at least 0.5% lower than the Commonwealth Bank’s new 7.81 standard variable loan rate.

The Top Fixed Home Loan Rates are:

With the market expecting the Reserve Bank to raise rates by an additional .25% – 0.50% over the next 12 – 18 months now is the time to take advantage of the competitive fixed rate deals while they last.

Compare all fixed rate home loans at mozo.com.au. Be quick!

Since the last time the Reserve Bank cut its interest rates back in April 2009, the home loan market has seen a predictable and steady shift upward in rates, save for the odd excessive rate hike. In what is one of the more dramatic and interesting days in recent memory, both CUA and AMP have announced cuts of 0.25% and 0.22% respectively to their flagship variable rate home loans. It is indeed a welcome news day for consumers, with competition now firmly back on the agenda in the marketplace.

CUA has laid its cards on the table, declaring that they are actively looking to “exploit the perceived absence of competition in the banking industry”. Only time will tell as to the sustainability of the competition-fuelling strategy CUA is looking to push. Indeed, this a sharp contrast to the news of yesterday, where comments out of Westpac suggested that pressures on lenders were only increasing and bigger rate rises loomed. CUA’s new standard variable rate loan at 6.37% is now a full half a percent below the average Big 4 rate, while AMP’s basic variable rate is at an even better 6.27%. AMP’s is advertised as limited time offer, so perhaps they’re waiting to gauge the reaction of both consumers and competitors.

So will competition and rate cuts be the ‘new black’? One thing is for sure, the once stagnant home loan market has been given the shake up it so sorely needed. With interesting times ahead, now is a great time to reevaluate your loan and examine the marketplace. Stay tuned and watch this space, because the home loan battle lines are only just being drawn.

Compare home loans at mozo.com.au