August home loan snapshot: Lenders fire up interest rates ahead of RBA peak

Snowy village with high interest rate home loans in the purple mountains

It’s been an unusually warm winter indeed. Despite the Reserve Bank of Australia holding official interest rates steady last month, many lenders cast fresh sparks on their home loans. The ensuing fire has blazed through fixed-rate and variable-rate offers alike and pushed up the averages in Mozo’s database. 

The variable average for owner-occupiers for August sits at 6.60%, while depending on the term, fixed rates now average between 11 to 20 basis points higher than at the start of July. 

Mortgages have long been a casualty of the RBA’s efforts to chase down runaway inflation, but if lenders move even when the RBA doesn’t, do borrowers still stand a chance?

Value has been harder to find these days. Long gone are the interest rates that begin with a ‘4’, and many cashback offers (or indeed, special offers in general) have been pulled from the market. Rome is burning, indeed. 

There is grace to be had, however. The RBA kept its hands off the cash rate lever for another month in August, leaving official interest rates at 4.10%. That’s two months in a row now, so the tightening cycle is drawing to a close. The economy will contract further into spring as delayed hike effects catch up to household budgets. Though the bank retains a tightening bias, rate hikes may be over for now

So with another hold in store, how do home loans look for August?

Fixed rates push higher as lenders reset expectations

Two buyers successfully get home thanks to good home loan

A quiet July never happened for fixed rate home loans. Despite the RBA pause, lenders ratched up their short and long-term fixed rates – many between 15 and 65 basis points. 

Fixed rates are inherently predictive. The latest wave of fixed hikes may indicate lenders expect official interest rates to go higher and stay higher for longer, which isn’t great news for borrowers hoping to duck the last of the cycle by fixing their home loan. 

There are still some relatively low fixed rates that could outcompete a variable one right now, but with inflation expected to come down next year, don’t expect many fixed deals to stay competitive for the duration of their term. 

At the time of writing, these are the average fixed rates for owner occupiers with an 80% LVR and a $400,000 loan:

  • 1-year: 6.29% p.a. 
  • 2-year: 6.26% p.a. 
  • 3-year: 6.23% p.a. 
  • 4-year: 6.47% p.a. 
  • 5-year: 6.46% p.a.

Recent home loan rate movements

New home loan borrowers receive key from lending agent

Winter winds blew chilly for home loans in July, despite the tepid relief of the RBA rate pause. Here are some of the most dramatic home loan changes Mozo recorded in its database.

  • ANZ hiked rates by 10 bp on its headline variable home loan, Simplicity PLUS, and by 15 - 55 bp on its fixed rate offers. 
  • NAB pulled a similar move to ANZ by adding 10 bp to its lowest rate on the Base Variable Rate Home Loan Special Offer and 35 - 50 bp to fixed terms. 
  • Commonwealth Bank’s Extra Home Loan rates crept up by 3 to 5 basis points, but some of its fixed offers rocketed by 40 to 65 bp. 
  • ING broke free from the pack by cutting rates to 10 to 15 bp, depending on borrower type. Don’t get too comfy, though: the online bank also withdrew its cashback offers for refinancers.

Current lowest home loan rates

Woman compares home loans on her tablet

Here are the lowest variable and fixed mortgage rates (P&I, LVR <80%) among lenders we track.

Lowest variable rates — Mozo database (1 August 2023)^^

Lender
Loan
Variable rate
Pacific Mortgage Group
Standard Variable Home Loan
5.54% p.a. (5.54% p.a. comparison rate*)
Hume Bank
liteBlue Rate Variable Home Loan
5.59% p.a. (5.60% p.a. comparison rate*)
Unloan
Unloan Variable
5.59% p.a. (5.50% p.a. comparison rate*)
Firefighters Mutual Bank
Your Way Basic Variable Home Loan
5.64% p.a. (5.68% p.a. comparison rate*)

Lowest and average fixed rates — Mozo database (1 August 2023)^^

Term
Rate leader
Fixed rate
1-year
The Capricornian
5.45% p.a. (6.87% p.a. comparison rate*)
2-year
Australian Mutual Bank
5.23% p.a. (6.08% p.a. comparison rate*)
3-year
Australian Mutual Bank
5.33% p.a. (6.06% p.a. comparison rate*)
4-year
Qudos Bank
5.84% p.a. (5.94% p.a. comparison rate*)
5-year
RACQ Bank
5.54% p.a. (6.20% p.a. comparison rate*)

The above are the lowest rates in our database for borrowers with an LVR < 80%. More competitive rates are available for borrowers with lower loan-to-value ratios.

If you’re considering buying property or refinancing your existing mortgage, use Mozo’s home loan comparison table to examine lenders side-by-side, or use our refinance calculator to see how much you could save.

^^Interest rates are based on an owner occupier making principal and interest repayments on a $400,000 loan with an 80% LVR. Check out our dedicated Australian home loan statistics page for more information on average mortgage rates.

Compare home loans in the table below. 

Compare home loans - last updated 4 March 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    Home Fixed Rate

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    5.80% p.a.
    fixed 3 years
    5.91% p.a.

    Enjoy the security of a competitive fixed interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply). Mozo Experts Choice award winner.

    Compare
    Details
  • Straight Up

    Obliterate, Owner Occupier, Principal & Interest, <50% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.24% p.a. variable
    6.24% p.a.

    Get a low variable rate depending on your deposit with Athena’s Straight Up Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.

    Compare
    Details
  • Offset Home Loan

    Package, Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.15% p.a. variable
    6.40% p.a.

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

    Compare
    Details

* 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.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.