Christmas comes early for borrowers with heaps of home loan rate cuts

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Kelly Emmerton

20 Nov 2017

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Key points

  • First home buyers and refinancers are the big winners in recent rate cuts

  • 30 lenders have cut variable rates for principal and interest borrowers since October

  • 70 lenders are now offering variable rates under 4.00%

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The festive season is fast approaching, and lenders are certainly getting into the Christmas spirit, with 30 lenders lowering rates on variable rate home loans since the beginning of October, Mozo data shows.

“First home buyers and refinancers making principal and interest repayments are on the Nice list this year, with a tonne of ultra competitive rates on offer for these borrowers,” said Mozo Director Kirsty Lamont.

Among the lenders reducing rates, the average rate cut was 15 basis points, while one generous lender cut by more than 5 times that amount. There are now a massive 70 lenders in Mozo’s database offering up variable rates under 4.00% on principal and interest home loans.

“These rate cuts have come at a really great time for those looking to get into the property market, with cooling prices and stamp duty exemptions in some major markets making conditions much more welcoming for first time buyers,” said Lamont.

“And for owner-occupiers who already have a mortgage, this presents a perfect opportunity to re-evaluate the deal you’re getting and jump on a better rate.”

Low Rate Home Loans - December 2017 - rates updated daily

  • Promoted

    loans.com.au

    2.88% p.a. variable

    2.90% p.a.

    $1234

    Product details Close details
    Go to site
    Smart Home Loan

    A low-rate home loan that could save you thousands. No application or ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount, Limited time only.

    • 2.88% p.a. variable

    • 2.90% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $50,000

    • $1,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

    Go to site

  • Promoted

    UBank

    2.84% p.a. variable

    2.84% p.a.

    $1234

    Product details Close details
    Go to site
    UHomeLoan - Discount Offer

    Free redraw with flexible repayments. Min 20% deposit. Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category^.

    • 2.84% p.a. variable

    • 2.84% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $200,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

    Go to site

  • Promoted

    Athena

    2.84% p.a. variable

    2.80% p.a.

    $1234

    Product details Close details
    Go to site
    Variable Home Loan

    Get the low rate you deserve with Athena, one of Australia's newest direct lenders. No fees and fee-free redraw. The same low rates for new and existing customers. Score loyalty bonus for making repayments. Min 20% deposit.

    • 2.84% p.a. variable

    • 2.80% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $100,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

    Go to site

  • Promoted

    Well Home Loans

    2.82% p.a. variable

    2.86% p.a.

    $1234

    Product details Close details
    Go to site
    Well Balanced

    Well Balanced home loan is a low rate home loan with free online redraw and no valuation fee. Purchase, Refinance or Equity Release purposes allowed. Best New Home Loan in Mozo Experts Choice Awards 2019.^

    • 2.82% p.a. variable

    • 2.86% p.a.

    • $785

    • $0.00

    • $300.00

    • yes - free

    • yes - free

    • Optional - $10 per month

    • 80.00%

    • $200,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Well Balanced

    Go to site

  • Promoted

    Tic:Toc

    2.79% p.a. variable

    2.80% p.a.

    $1234

    Product details Close details
    Go to site
    Variable Home Loan

    Tic:Toc’s award-winning online platform could save you thousands. No fees, fee-free redraws and an optional offset account for $10 per month. Minimum 10% deposit. Winner of a Mozo Experts Choice Award 2019 for Online Home Lender of the Year 2019.^

    • 2.79% p.a. variable

    • 2.80% p.a.

    • $0

    • $0.00

    • $325.00

    • yes - free

    • yes - free

    • Optional - $10 per month

    • 90.00%

    • $50,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

    Go to site

  • Promoted

    Homestar

    2.74% p.a. variable

    2.77% p.a.

    $1234

    Product details Close details
    Go to site
    Star Essentials Home Loan

    One of the lowest home loan rates in town packed with essential features. No application or ongoing fees. Unlimited additional repayments with free online redraws. Min. loan size $150k, no construction loans.

    • 2.74% p.a. variable

    • 2.77% p.a.

    • $596

    • $0.00

    • $535.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $150,000

    • $850,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Star Essentials Home Loan

    Go to site

  • Promoted

    Queensland Country Credit Union

    3.49% p.a.
    fixed 3 years

    3.90% p.a.

    $1234

    Product details Close details
    Go to site
    RateSaver

    No Annual or Monthly Loan Maintenance Fees. Pay up to $10,000 in additional repayments each year. Borrow up to 90% LVR.

    • 3.49% p.a.
      fixed 3 years

    • 3.90% p.a.

    • $500

    • $0.00

    • $0.00

    • yes - up to $10,000 per year

    • no

    • no

    • 90.00%

    • $100,000

    • $5,000,000

    • Fixed

    • Interest Only

    • Investor

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the RateSaver

    Go to site

*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 the amount and term you entered.

**Initial monthly repayment figures are estimates only, based on the advertised rate, and a loan of $500,000 repaid over 25 years. 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.

What to look for in a low rate home loan

A competitive comparison rate. When you’re comparing low rate loans, make sure to take a look at the comparison rate, as well as the headline interest rate. “The comparison rate reflects fixed fees and the interest rate, so it gives you a more accurate idea of what a loan will really cost you,” explains Lamont. A low interest rate paired with a high comparison rate can mean you’ll be up for a bunch of hefty fees!

Key money-saving features. Full feature home loans are generally more expensive than their no-frills counterparts. So to keep your mortgage rate low, choose an option that includes the features you will use and not the ones you won’t. “Pick and choose the extra features you’ll really use. For example, an offset account can save you heaps, but there’s no point paying extra to have it if you don't actually use it,” says Lamont.

An LVR that suits your budget. Some of the lowest rates around are reserved for borrowers with a low loan-to-value ratio - meaning a bigger deposit. So the more you can save for a home loan deposit, the more likely you will be able to snag a rock bottom rate and save on interest. “One thing to keep in mind is that if you have less than a 20% deposit, you’ll probably wind up paying Lender’s Mortgage Insurance as well, which can add thousands of dollars onto your home loan bill,” says Lamont.

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