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

Ceyda Erem

08 Mar 2019

Home loan race content

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.

Variable rate home loan offers

Rates updated daily. Advertiser disclosure.

  • loans.com.au
    Mozo Expert Choice Badge" style="width:60px;">

    1.85% p.a.variable for 24 months and then 2.25% p.a.

    2.21% p.a.

    $1234

    Product details Close details
    Smart Booster Home Loan

    2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    1.85% p.a.variable for 24 months and then 2.25% p.a.

    2.21% p.a.

    New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.

    Smart Booster Home Loan

    New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.

    • 1.85% p.a.variable for 24 months and then 2.25% p.a.

    • 2.21% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • Optional - with 0.10% additional interest

    • 80.00%

    • $520

    • $50,000

    • $1,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Smart Booster Home Loan

    Details Close

  • UBank
    Mozo Expert Choice Badge" style="width:60px;">

    2.34% p.a.

    2.34% p.a.

    $1234

    Product details Close details
    UHomeLoan - Discount Offer

    Owner Occupier, Principal & Interest

    2.34% p.a.

    2.34% p.a.

    Enjoy a super low rate. $0 fees to consider. Fast and easy online application. Free redraw and free extra repayments. Flexible payment terms. Min 20% deposit required.

    UHomeLoan - Discount Offer

    Enjoy a super low rate. $0 fees to consider. Fast and easy online application. Free redraw and free extra repayments. Flexible payment terms. Min 20% deposit required.

    • 2.34% p.a.

    • 2.34% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $0

    • $100,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the UHomeLoan - Discount Offer

    Details Close

  • Athena
    Mozo Expert Choice Badge" style="width:60px;">

    1.99% p.a.

    1.99% p.a.

    $1234

    Product details Close details
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    1.99% p.a.

    1.99% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.

    Celebrate Variable Home Loan

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.

    • 1.99% p.a.

    • 1.99% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 60.00%

    • $0

    • $100,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Celebrate Variable Home Loan

    Details Close

  • Nano

    1.99% p.a.

    1.99% p.a.

    $1234

    Product details Close details
    Variable Home Loan

    Owner Occupier, Principal & Interest

    1.99% p.a.

    1.99% p.a.

    Refinance only. Super-fast digital application process. Zero upfront fees. No on-going service fees. Free 100% offset sub account. Apply Online & Refinance before 29 October 2021 for the chance to WIN your home loan interest free - Save up to $1.1 million. T&Cs apply.

    Variable Home Loan

    Refinance only. Super-fast digital application process. Zero upfront fees. No on-going service fees. Free 100% offset sub account. Apply Online & Refinance before 29 October 2021 for the chance to WIN your home loan interest free - Save up to $1.1 million. T&Cs apply.

    • 1.99% p.a.

    • 1.99% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • yes - offset sub account

    • 75.00%

    • $0

    • $100,000

    • $2,500,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Monthly

    Read our Mozo Review to learn more about the Variable Home Loan

    Details Close

  • Macquarie

    2.14% p.a.

    2.14% p.a.

    $1234

    Product details Close details
    Basic Home Loan

    Owner Occupier, LVR<60%, Principal & Interest

    2.14% p.a.

    2.14% p.a.

    Competitive low variable rate. No application or account management fees. Flexibility to split your loan and set different repayment types. Fee free withdrawals of your savings.

    Basic Home Loan

    Competitive low variable rate. No application or account management fees. Flexibility to split your loan and set different repayment types. Fee free withdrawals of your savings.

    • 2.14% p.a.

    • 2.14% p.a.

    • $0

    • $0.00

    • $400.00

    • yes - free

    • yes - free

    • no

    • 60.00%

    • $0

    • $150,000

    • $5,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Monthly

    Read our Mozo Review to learn more about the Basic Home Loan

    Details Close

^See information about the Mozo Experts Choice Home loans Awards