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

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

    3.03% p.a. variable

    3.05% 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.

    • 3.03% p.a. variable

    • 3.05% 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

    3.34% p.a. variable

    3.34% p.a.

    $1234

    Product details Close details
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    UHomeLoan - Discount Offer

    Enjoy a low rate & no bank fees (on variable loans) from one of Australia's leading digital banks. Easy & fast to apply, you'll get free redraw with flexible repayments. Min. 20% deposit required. Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category.

    • 3.34% p.a. variable

    • 3.34% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes

    • no

    • 80.00%

    • $200,000

    • $699,999

    • 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

    3.09% p.a. variable

    3.05% p.a.

    $1234

    Product details Close details
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    Variable Home Loan

    With low rates, no fees, and automatic rate match, new-comer Athena wants you to love them and leave them. Refinance only. Minimum 20% deposit.

    • 3.09% p.a. variable

    • 3.05% 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

  • Featured Product

    ME

    3.43% p.a.
    fixed 2 years

    4.05% p.a.

    $1234

    Product details Close details
    Go to site
    Flexible Home Loan Member Package

    Option to split your loan into fixed and variable for 1-7 years. Offset available on the variable rate facility. Extra repayments up to $30K during fixed rate period and free redraws available (above $500) when you're ahead of your payments.

    • 3.58% p.a.
      fixed 3 years

    • 4.26% p.a.

    • $200

    • $395.00 yearly

    • $350.00

    • yes - free up to $30,000 during fixed rate period

    • no

    • no

    • 80.00%

    • $40,000

    • -

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

    Go to site

  • Promoted

    Bank of Queensland

    2.99% p.a.
    fixed 3 years

    4.19% p.a.

    $1234

    Product details Close details
    3 Year Discount Fixed Rate

    Apply by 31 August 2019. Minimum loan amount of $300k and LVR max of 80%. Free additional repayments up to $5,000 per year. $1,000 cashback for first home buyers

    • 2.99% p.a.
      fixed 3 years

    • 4.19% p.a.

    • $450

    • $10.00 monthly

    • $320.00

    • yes - free up to $5,000 p.a

    • no

    • no

    • 80.00%

    • $300,000

    • -

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the 3 Year Discount Fixed Rate

  • Promoted

    Newcastle Permanent

    3.49% p.a. variable

    3.49% p.a.

    $1234

    Product details Close details
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    Special Real Deal Home Loan

    Special Real Deal owner occupied home loan with principal and interest repayments and an LVR of less than 90%

    • 3.49% p.a. variable

    • 3.49% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - fees apply

    • yes - partial only

    • 90.00%

    • $150,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Special Real Deal Home Loan

    Go to site

  • Promoted

    HSBC

    3.47% p.a. variable

    3.48% p.a.

    $1234

    Product details Close details
    Go to site
    Discounted Home Value Loan

    As of 22nd July HSBC will be reducing this rate to 3.27% p.a.* (3.28% p.a. comparison rate^) so enquire now and be one of the first to make the most of this great rate. Enjoy unlimited free extra repayments and no ongoing service fees when you apply by 31 July (t&cs apply). Get help with the application process with an HSBC relationship manager. Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category.^

    • 3.47% p.a. variable

    • 3.48% p.a.

    • $150

    • $0.00

    • $300.00

    • yes - free

    • yes - free online

    • no

    • 90.00%

    • $50,000

    • $7,500,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Discounted Home Value Loan

    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 $150,000 over 25 years.

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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