February home loan snapshot: House prices have a hot girl summer

Key Points

  • The RBA won’t hike in February.
  • Fixed interest rate home loans have begun to drop.
  • Property prices are heating up again.

Reading the property market is like reading tea leaves. But perhaps the leaves are onto something this month. Things seem to have shifted.

Most property experts and economists agree the Reserve Bank of Australia (RBA) is done hiking interest rates for this cycle. Inflation has slowed down (or has increased less quickly), so the RBA is most likely gearing up for an extended interest rate hold. 

Cuts could also be on the forecast for later this year, but this is us reading tea leaves. The timing could shift depending on the economy. 

“No new rate hikes in 2024”, at least, is excellent news for home buyers and homeowners alike. No hikes mean no increases to home loan repayments, which means greater affordability – right? 

Let’s get into what borrowers and home buyers need to know in our February home loan snapshot.

Australian property prices are heating up

Home values are once more on the upswing into February, reports CoreLogic, but the price increases aren’t felt equally across Australia’s capital cities.

Notably, Melbourne (-0.1%), Hobart (-0.7%), and Canberra (-0.2%) posted marginal declines in CoreLogic’s monthly home values index. It’s a summer slump – but barely. 

The national average, however, clocked in at +0.4% growth in January, up from the +0.3% increases in November and December. 

The research firm has consistently flagged 2024 as one to watch for home value growth, and despite the odds stacked against home buyers, high migration and the hellish rental market have kept housing demand tight. 

“Realistically, I don’t think the housing market will cool off,” says Mozo property expert Peter Marshall. 

“Home value growth will be slower in most capital cities thanks to high interest rates, but intense buyer competition still drives property prices. I just don’t see any meaningful way the housing market will slow down – for some years, now.”

The average mortgage is well over $600k in Australia now, and it’s worth remembering that the bulk of your mortgage repayments isn’t interest: it’s principal. (Unless you’ve gone interest-only, of course). 

So, while waiting for rate cuts to buy is all well and good, consider how rising house prices affect your finances. An extra 0.5% on your 6.00% interest rate can be an extra few hundred dollars per month in mortgage repayments. A 5% increase ($30,000) in your principal adds slightly more.

Principal
Interest rate
Monthly repayment
Added costs
$600,000
6.00%
$3,866

$600,000
6.50%
$4,051
$185
$630,000
6.00%
$4,059
$193

Figures calculated for a principal & interest home loan with a 25-year term.

You can crunch the numbers yourself using Mozo’s free mortgage repayments calculator.

Mortgage lenders still increasing rates, despite the RBA hold

The RBA didn’t meet in January, and most experts agree the RBA will continue to hold the cash rate at 4.35% in February. Yet despite no official pressure to raise variable rates, many lenders have passed along increases to customers anyway. 

Cashback offers for refinancers have also escaped the market – another 4 have disappeared. A moment of silence for these perks, please.

To be fair, however, a few home loan lenders have slashed variable rates, leaving some balance. After all, the average variable rate for owner-occupied properties hasn’t shifted in the Mozo database in two months: it’s still 6.85% p.a.

But if you’re looking for a sleek home loan interest rate, the market hasn’t turned in your favour just yet. Let’s run through some noteworthy rate changes for February.

  • ANZ lifted rates for its Simplicity PLUS basic loan by 10 basis points. 
  • Australian Mutual Bank added 20 bp to most of its variable rates. 
  • ING increased its range of variable options by 5 bp. 
  • Macquarie raised raised 10 bp in December, then slashed them between 9-21 basis points at the end of January, a week ahead of the RBA. 
  • Unloan finally passed along the November rate hike: its loans are now up 25 bp. Up also added 25 bp to its rate (for owner-occupiers only). 

Bankwest lowered its basic option rates by 10 bp.

Fixed rate cuts have begun – barely

Fixed interest rates for home loans have started to decline in the Mozo database. Far more fixed cuts than hikes came through in January, which has inched the averages down for 1 to 5-year terms.

This could be good news for things to come. Fixed rates are inherently predictive since lenders set them based on what official interest rates will do during that time. Falling fixed rates now mean lenders expect rates to start coming down later – so a rate cut this year looks pretty good!

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: 6.53% p.a. 
  • 2-year: 6.43% p.a. 
  • 3-year: 6.41% p.a. 
  • 4-year: 6.56% p.a. 
  • 5-year: 6.61% p.a.

Current lowest home loan rates

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

Lowest variable rates — Mozo database (1 February 2024)^^

Lender
Loan
Variable rate
Pacific Mortgage Group
Standard Variable Home Loan
5.89% p.a. (5.89% p.a. comparison rate*)
The Mutual Bank
Special Budget Home Loan
5.89% p.a. (5.90% p.a. comparison rate*)
Community First Bank
Basic Variable Home Loan
5.94% p.a. (5.99% p.a. comparison rate*)
Greater Bank
Discount Great Rate Home Loan
5.94% p.a. (5.96% p.a. comparison rate*)

Lowest and average fixed rates — Mozo database (1 February 2024)^^

Term
Rate leader
Fixed rate
1-year
Illawarra Credit Union
5.90% p.a. (7.09% p.a. comparison rate*)
2-year
Australian Mutual Bank
5.53% p.a. (6.30% p.a. comparison rate*)
3-year
Australian Mutual Bank
5.48% p.a. (6.24% p.a. comparison rate*)
4-year
HSBC
5.69% p.a. (6.37% p.a. comparison rate*)
5-year
Australian Mutual Bank
5.63% p.a. (6.16% 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.

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 search our database of 472 home loans using the filters below.
Last updated 13 July 2024 Important disclosures and comparison rate warning*
  • 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.

  • 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.

  • 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.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.19 % p.a.
    Variable
    Comparison rate
    6.23 % p.a.
    Initial monthly repayment
    $3,059
    Go to site

    No application or service fees. Flexibility to choose your repayment schedule (weekly, fortnightly or monthly). Use multiple Everyday Accounts with 100% interest offset to pay your home loan off sooner.

  • Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Lock in a competitive interest rate and enjoy peace of mind for the fixed period. Available for owner occupied new and refinanced home loans with at least 20% deposit. Split option available as well as offset and redraw. Noapplication, ongoing or banking fees. Third Party fees may be applicable - payable within loan repayments. Extra repayments up to $20K per annum permitted. Apply online, 100% member owned credit union.

  • 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.

  • 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.

  • Fixed Rate Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Fixed 3 years
    Comparison rate
    6.15 % p.a.
    Initial monthly repayment
    $3,027

    Additional repayments of up to $10K per fixed year. Interest rate discounts available. Waiver of $499 application fee when combined with an Orange Advantage Home Loan.

  • 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.

  • Mortgage Simplifier

    • LVR<80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • 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.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.19 % p.a.
    Variable
    Comparison rate
    6.23 % p.a.
    Initial monthly repayment
    $3,059
    Go to site

    No application or service fees. Flexibility to choose your repayment schedule (weekly, fortnightly or monthly). Use multiple Everyday Accounts with 100% interest offset to pay your home loan off sooner.

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR<70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.20 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.42 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.59 % p.a.
    Fixed 3 years
    Comparison rate
    7.06 % p.a.
    Initial monthly repayment
    $3,190

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

image of houses

Need help with refinancing?

You might have questions that need personal answers. We’ve teamed up with the mortgage brokers at Lendi to get you the answers you need, and a home loan deal you deserve.

Learn more

* 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

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