A race to the bottom - the five home loan lenders slashing rates

Since the start of the year, many Aussie homeowners have felt the pinch from variable home loan rate rises, especially from the major banks. But the trend toward hiking rates could be about to change thanks to moves by challenger lenders and smaller banks. 

New kid on the block, Athena, kickstarted the trend, taking the nation by storm last week with a 3.49% variable rate (3.51% comparison rate*) and a mission to get Aussie homeowners debt-free. The online lender calls itself a ‘home loan wrecker’ and encourages borrowers to pay off their mortgage as fast as they can so they can enjoy their home.

Then yesterday, veteran online lender, loans.com.au, launched their Smart Home Loan and took the lead with a competitive variable rate of 3.48% (3.50% comparison rate*). When compared to the average variable rate in the Mozo database, the Smart Home Loan would see homeowners save $2,364 a year for a $400,000 loan over 30 years.

The lenders slashing rates 

Kogan Money has announced a 0.10% cut to the variable rate on its Essential Home Loan to 3.59% (3.60% comparison rate*) for owner occupiers. Kogan - which you might be more familiar with when it comes to cheap electronics - branched out into home loans last year, and is funded by Adelaide Bank and Pepper Group who together have over 40 years experience in financial services.

“We’ve always seen online lenders lead the pack with competitive products, and with more and more online lenders like loans.com.au and Kogan Money, shaking up the market with competitive rates, we may start seeing major banks follow in their footsteps, ” said Mozo Director, Kirsty Lamont.

In fact, NAB has now made changes to its Base Variable Home Loan special, cutting it’s rate by 20 basis points to 3.79% (3.83% comparison rate*) for owner occupiers borrowing with a 20% deposit.

“What we’re starting to notice in our database is that lenders are often choosing to cut their lowest base rate product. It really is a race to see who can entice customers with the lowest rate offering,” said Lamont.

But it’s not just innovative lenders causing a stir in the home loan market. There have also been rate reductions on the lowest rate products from three more established lenders since the start of February, two of which made decreases by 10 basis points:

Bank of Sydney, BOSBasic, 3.55% (3.62% comparison rate*)

- State Custodians, Low Rate Home Loan with Offset, 3.58% (3.59% comparison rate*)

Suncorp, Back to Basics Special, 3.69% (3.70% comparison rate*)

“The big banks have been hiking rates, citing funding pressures as the main reason. It’ll be interesting to see if they respond to these new rock bottom offers from challenger lenders with better deals of their own,” said Lamont.

“And if your bank isn’t willing to match or compete with the new offers, it might be time for homeowners to make the switch.”

So if you think you could be on a better deal with your home loan, head on over to our home loan comparison tool to compare a range of offers today.

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can compare more home loans here.
Last updated 19 February 2025 Important disclosures and comparison rate warning*
What are your home loan needs?

Your loan-to-value ratio (LVR): 50%

Loan amount and LVR will affect interest rates.

  • Promoted

    Unloan Variable Home Loan

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Unloan has confirmed they will decrease rates by 0.25% p.a. effective 21 February 2025. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Promoted

    Variable Home Loan 90

    • Principal and Interest
    • LVR <90%
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.08 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Loans.com.au has confirmed they will decrease rates by 0.25% p.a. effective 4 March 2025. Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

  • Promoted

    OMG Home Loan

    • Owner Occupier
    • Principal & Interest
    • <60% LVR
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

  • Everyday Home Loan

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.94 % p.a.
    Variable
    Comparison rate
    5.99 % p.a.
    Initial monthly repayment
    $2,978
    Go to site

  • Unloan Variable Home Loan

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Unloan has confirmed they will decrease rates by 0.25% p.a. effective 21 February 2025. Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • OMG Home Loan

    • Owner Occupier
    • Principal & Interest
    • <60% LVR
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

  • Budget Home Loan

    • LVR <80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.07 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Enjoy a discounted variable home loan from IMB. Get up to $4,000 cashback (T&Cs apply). Life-of-loan discount off IMB’s standard variable interest rate. Unrestricted additional repayments. Free Internet and Mobile Banking redraws (T&Cs apply). No monthly fees to pay. Up to a 30 year loan term. Split loan available. No offset account.

  • Variable Home Loan 90

    • Principal and Interest
    • LVR <90%
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.08 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Loans.com.au has confirmed they will decrease rates by 0.25% p.a. effective 4 March 2025. Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

  • Basic Variable Home Loan

    • Owner Occupier
    • LVR <60%
    Interest rate
    6.13 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,040
    Go to site

    Competitive interest rate. No ongoing monthly loan maintenance fees. You can redraw your repayments if you’re ahead. Choose to repay weekly, fortnightly, or monthly. Make extra payments without penalty, to pay off your home loan even faster.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Macquarie has confirmed they will decrease variable home loan reference rates by 0.25% p.a. effective 28 February. Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

Showing 7 results from 420 home loans. Use the filters to see more

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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