February home loan snapshot: UBank drops new leading fixed rate amid more cuts

By Tom Watson · · 3 min read
Fact Checked
Advertiser disclosure
man-looking-at-home-loan-rates-on-phone

It may be a new year, and the three Reserve Bank interest rate cuts of 2020 may be slowly disappearing in the rearview mirror, but the home loan rate cut trend hasn’t let up in 2021.

According to the latest edition of the Mozo Banking Roundup a number of lenders have already reduced their rates this year, pushing the average fixed and variable rates in our database to fresh lows.

So which lenders have been busy cutting rates? What does an average rate look like? And which lenders are offering the lowest fixed and variable rates in February? Let’s get into it.

UBank grabs pole position with new 3-year fixed rate

If you missed the memo, lenders really went hard on dropping fixed home loan rates during 2020. In fact, fixed rate offers appear to have taken over from variable offers as the loan type lenders are competing the most aggressively on.

Since December the average fixed rates on 1-5 year terms in the Mozo database have all dropped, with the average 2-year fixed rate now sitting at just 2.34%. A number of cuts from lenders in recent few weeks have helped drive these averages down of which highlights include:

  • NAB subsidiary UBank trimmed between 15 and 35 basis points off select fixed rate loans. The 3-year fixed rate for owner occupiers on its UHomeLoan (Fixed) is now the lowest in our database at 1.75% (2.22% comparison rate*). 
  • Newcastle Permanent cut 19 basis points off the 4-year fixed rate on its packaged Special Fixed Rate Home Loan to 1.99% (3.46% comparison rate*). Although it also increased the rate on its 5-year term by 20 basis points.
  • P&N Bank cut fixed rates by between 5 and 20 basis points, meaning the 4-year fixed rate on its Fixed Rate Home Loan offer is now 1.99% (3.27% comparison rate*).

To put these latest changes into perspective here’s a snapshot of the lowest fixed rate^ offers in our database, plus the Mozo fixed rate averages, as of February 1, 2021:

TermRate leaderFixed rateAverage
1-yearTic:Toc1.89% (2.18% comparison rate*)2.36%
2-yearTic:Toc1.89% (2.15% comparison rate*)2.34%
3-yearUBank1.75% (2.22% comparison rate*)2.37%
4-yearBank of Melbourne and St.George1.94% (3.21% comparison rate*)2.40%
5-yearAussie1.99% (2.35% comparison rate*)2.65%

Variable rate cuts flow in at slower pace

Compared to fixed rates, the action on the variable rate front has been more subdued of late. That’s not to say that there’s been zero movement though, because a number of lenders have reduced their variable rates in recent weeks. Some of the changes of note include:

  • HSBC took 15 basis points off its Home Value Loan which means the lowest rate available to owner occupiers is currently 2.44% (2.45% comparison rate*) - one of the lowest on offer from a bank in our database.
  • Online lender Freedomlend further cemented itself among the players with the very lowest variable rates in our database by cutting its Variable Home Loan offer by 2 basis points to 2.17% (2.17% comparison rate*).
  • MOVE Bank trimmed its Straightforward Home Loan offer for owner occupiers by 15 basis points to 2.39% (2.43% comparison rate*).

As a result of the recent reductions the average variable rate in the Mozo database has dropped slightly to 3.30%, though the most competitive rates on offer remain well below that figure. To put that rate into perspective, here’s a snapshot of the five lowest variable rates^ in the Mozo database as of February 1, 2021:

Variable rateLenderLoan
1.99% (2.05% comparison rate*)Reduce Home LoansSuper Saver Variable
2.09% (2.09% comparison rate*)Pacific Mortgage GroupStandard Variable
2.14% (2.19% comparison rate*)HomestarStar Essentials
2.17% (2.17% comparison rate*)FreedomLendVariable Home Loan
2.17% (2.20% comparison rate*)Well Home LoansWell Balanced

And while the official cash rate is highly unlikely to be reduced further at the first Reserve Bank monthly meeting of 2021 later today, lenders may continue to cut variable and fixed home loan rates throughout February as competition remains fierce.

RELATED: Fixed home loan rates are at all-time lows, is now the time to lock in a rate?

To keep up with the latest rates and news, head on over to our home loan comparison hub. Or if you’re thinking about taking out a new loan or making the switch from your current lender, why not start by comparing some of the competitive offers in the table below.

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

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*

Promoted

  • 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.

  • 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.

  • 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.

  • Flex Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.99 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

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

  • 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.

  • 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 $10,000,000.

  • 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
    6.54 % p.a.
    Fixed 2 years
    Comparison rate
    7.10 % p.a.
    Initial monthly repayment
    $3,174

    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

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.

Compare home loans