December home loan snapshot: More lenders join the ‘sub 2%’ club

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It’s now been well over a year since the Reserve Bank’s last cash rate cut and the flood of home loan cuts that followed, yet instead of relative rate stability, lenders seem to be making as many changes as ever.

So what are the latest figures worth knowing about as a borrower? Read on for a snapshot of the latest home loan rate changes, plus a run through of the lowest rates and average rates in the Mozo database.

Recent variable and fixed rate movements

Boy oh boy, there’s been a lot of changes of late, but let’s start with the variable rate side of the equation where the vast majority of changes have been cuts. In the month leading up to December there were enough cuts recorded in the Mozo database to drop our average rate for owner occupiers (<80% LVR, P&I repayments) by five basis points from 3.12% to 3.07% - the largest monthly drop since April 2020. Among the more significant changes:

  • ANZ took 23bp off of its Simplicity Plus loan meaning the current variable rate is 2.49% p.a. (2.53% p.a. comparison rate*) for owner occupiers (<80% LVR).
  • ING cut 15-25bp off its Mortgage Simplifier and Orange Advantage loans. Owner occupiers (LVR ≤80%) can now access rates as low as 1.99% p.a. (2.02% p.a. comparison rate*) on the Mortgage Simplifier.
  • Reduce Home Loans cut rates on a number of products, including its Super Saver Variable offer which is currently offering a rate of just 1.77% p.a. (1.86% p.a. comparison rate*) for owner occupiers with an LVR below 80%.
  • Well Home Loans dropped rates on its Well Balanced loan by 14bp, leaving the lowest rate available for owner occupiers (<80% LVR) at 1.85% p.a. (1.88% p.a. comparison rate*).
  • Westpac removed the 2-year intro rate from its Flexi First Option loan and cut the ongoing rate by 30bp to 2.29% p.a. (2.30% p.a. comparison rate*) for owner occupiers (<95% LVR).

On the flip side, after months of longer-term fixed rate increases it appears that lenders have started raising shorter-term fixed rates as well. As a result of these increases, the average fixed rates for owner occupiers across 1, 2, 3, 4 and 5-year terms in the Mozo database have all gone up. Here are some of the notable fixed changes from the past few weeks:

  • ANZ lifted rates by 20-40bp for both owner occupiers and investors across all fixed rate terms.
  • CBA also made some sweeping changes, increasing rates by between 20 and 70bp across a number of its fixed loans.
  • NAB hiked rates on a number of fixed rate loans, though it left its 1-year fixed rates unchanged.
  • Westpac also increased rates on a number of its fixed home loan offers, though it did leave a few 1-year fixed rates the same.

Lowest home loan rates

As lenders continue to lower their variable rates, the sharpest end of the market is getting increasingly crowded.

In fact, 22 lenders being tracked in the Mozo database have at least one variable loan with a headline rate below 2.00%. Some of those offers are for borrowers with loan-to-value ratios as low as 60%, but more than half can be accessed with a standard 80% LVR.

With that in mind, here are the lowest mortgage rates in our database for owner occupiers.

Lowest variable rates — Mozo database (December 1, 2021)^^

LenderLoanVariable rate
Reduce Home LoansSuper Saver1.77% p.a. (1.86% p.a. comparison rate*)
Well Home LoansWell Balanced1.85% p.a. (1.88% 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*)
Gateway BankGreen Plus Home Loan (Premium Package)1.89% p.a. (2.24% p.a. comparison rate*)

Lowest and average fixed rates — Mozo database (December 1, 2021)^^

TermRate leaderFixed rateMozo average
1-yearGreater Bank1.59% p.a. (2.15% p.a. comparison rate*)2.31%
2-yearAustralian Mutual Bank1.89% p.a. (2.52% p.a. comparison rate*)2.42%
3-yearMOVE Bank1.89% p.a. (3.14% p.a. comparison rate*)2.68%
4-yearBankwest2.29% p.a. (3.42% p.a. comparison rate*)2.95%
5-yearQBANK2.49% p.a. (3.59% p.a. comparison rate*)3.12%

RELATED: What can we expect from the property market in 2022?

Considering purchasing a new property or looking to refinance your existing mortgage? Make life easy by using our dedicated home loan comparison tables to view a range of different loan offers all in the one place, or if you’re looking for a real standout option take a look at some of the best home loans in Australia as determined by our expert judges. 

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

Compare home loans - last updated 25 January 2022

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
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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, loan amount and term entered. 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

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