CBA and ING join mortgage rate cut rush

By Tom Watson · · 3 min read
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Two of Australia’s largest lenders, Commonwealth Bank and ING, have joined the growing list of lenders which have recently reduced variable home loan rates after announcing cuts last Friday.

The Commonwealth Bank made a number of rate changes, but the major move was to the variable rate available on its Extra Home Loan which the bank reduced by 74 basis points to a new low of 2.39% p.a. (2.40% p.a. comparison rate*) for owner occupiers (70-80% LVR).

“It’s a big play by the Commonwealth Bank to drop a rate down towards the pointy end of the market, although the fact that they’re targeting relatively low risk borrowers suggests that they’re being quite cautious,” says Mozo Banking Expert, Peter Marshall.

“Yes there are better rates out there, but for people who want to go with a big bank, it’s pretty sharp. The Extra Home Loan doesn't have an offset account though, so if you’re after a full-feature loan, it won’t be for you.”

The Extra Home Loan rate is now the lowest comparable ongoing variable rate on offer from one of the big four, though it’s worth noting that Westpac’s Flexi First Option Home Loan currently comes with a 24-month introductory rate of 2.09% before reverting to 2.59% p.a. (2.52% p.a. comparison rate*). 

Big four lowest variable rates (owner occupied, <80% LVR) - October 18, 2021

LoanVariable rate
CBAExtra Home Loan2.39% p.a. (2.40% p.a. comparison rate*)
WestpacFlexi First Option Home Loan (2 Year Intro Rate)2.59% p.a. (2.52% p.a. comparison rate*)
NABBase Variable Rate Home Loan2.69% p.a. (2.69% p.a. comparison rate*)
ANZSimplicity PLUS2.72% p.a. (2.76% p.a. comparison rate*)

Meanwhile ING, which is one of the largest mortgage lenders outside of the big four, cut its Mortgage Simplifier and Orange Advantage (Package) rates by 25 basis points each.

That means the lowest variable rates available for owner occupiers (<80% LVR) are now 2.24% p.a. (2.27% p.a. comparison rate*) with the Mortgage Simplifier and 2.29% (2.64% p.a. comparison rate*) with the Orange Advantage (Package).

CBA and ING aren’t alone in having recently reduced variable rates though, as the likes of Bank Australia, Bendigo Bank and UBank have all made reductions to their respective home loan rates since October 1.

How low can variable rates go?

Of course, this isn’t a new trend - home loan rates have been on a downhill trajectory for a few years now. Since October 2018, the average variable rate in the Mozo database for an owner occupier (80% LVR, principal and interest repayments) has fallen from 4.35% to 3.14%.

And that’s just the average. Right now there are 32 lenders, including many larger banks, in the Mozo database offering at least one home loan (owner occupied, 80% LVR) with a headline variable rate under 2.30%.

Lowest variable rates Mozo database (owner occupied, <80% LVR) - October 18, 2021

LoanVariable rate
Reduce Home LoansSuper Saver1.88% p.a. (1.97% p.a. comparison rate*)
Tic:TocVariable Home Loan1.89% p.a. (1.90% p.a. comparison rate*)
Police Credit UnionBetter Home Loan1.89% p.a. (1.93% p.a. comparison rate*)
Pacific Mortgage GroupStandard Variable 1.94% p.a. (1.94% p.a. comparison rate*)
homeloans.com.auLow Rate Home Loan1.99% p.a. (1.99% p.a. comparison rate*)

The big question though is how long variable rates will continue to stay this low? According to Marshall, it’s unlikely that we’ll see dramatic changes any time soon.

“There are no signs yet that the Reserve Bank is going to bring forward the cash rate increase. The RBA seems confident that there aren’t going to be any inflationary issues, so that gives lenders a bit more confidence to continue to sharpen up their variable rates,” he says. 

“When you look at deposit accounts, which make up part of the cost of funding, banks continue to cut those rates. So as they erode the cost of deposits further and further, banks have more wiggle room to cut their mortgage rates - especially for groups of ‘safer’ borrowers such as prime owner-occupiers with lower LVRs.”    

RELATED: Bank of Mum and Dad report 2021: Property boom puts parents under pressure

Looking to take out a new mortgage, or perhaps you’re looking to make the most of the low rates currently on offer to refinance your existing loan? Well if you’re looking to compare loans from a range of lenders all in the one place then there’s only one place to start: the Mozo home loan comparison hub.

Home loan comparisons on Mozo

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can compare more home loans here.
Last updated 27 July 2024 Important disclosures and comparison rate warning*

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  • Unloan Variable

    • 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

    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.

  • 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

    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.

  • Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.13 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

  • Unloan Variable

    • 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

    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.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    6.01 % p.a.
    Variable
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $3,001
    Go to site

    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.13 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

  • 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

    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.

  • Flex Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.38 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

  • Offset Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.39 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    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.

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* 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.

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