Home loan price check: Rates have moved in 2020, has yours?

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To say that it’s been a noteworthy year for Australian interest rates and, as a result, mortgage rates may be an understatement.

Two rate cuts from the Reserve Bank in March, in addition to the three passed down in 2019, has resulted in an historically low cash rate of 0.25%. Add in the fallout from COVID-19 and, well,  the short of it is that home loan rates have been in flux!

So we don’t blame you if you haven’t kept up. 

Our data experts have though and they’ve crunched the numbers and provided a longer term view of the market movements as part of the July 2020 Mozo Banking Roundup. So if you’re interested in an overview of how home rates have shifted - and whether your own mortgage rate has kept pace - read on. 

Home loan rates for owner-occupiers

  • Biggest falls among fixed rates 
  • Refinancers targeted with discounted rates for lower LVRs
  • Lowest variable rate below 2.20%; fixed rates under 2.00%

As the latest Mozo Banking Roundup shows, home loan rates for owner-occupiers have dropped substantially since January - particularly at the lowest end of the market. 

This is true of both variable rates and fixed rates, but is most apparent in the 1-year fixed rate category. In January, the lowest 1-year fixed rate in the Mozo database was 2.74%, but in just six months that’s dropped by 76 basis points to 1.98%. 

The same is true for average^ rates. Since January, the average rate for borrowers making principal and interest repayments has dropped by: 28 basis points (variable rates), 67 basis points (1-year fixed rates) and 51 basis points (3-year fixed rates).

“Lenders have been quite concerned about taking on more risk than they need to in recent months,” said Mozo Banking Expert, Peter Marshall.

 “As a result owner-occupiers making principal and interest repayments - particularly those with an LVR below 80% - have become very appealing, and they've become the real target of competition among lenders.”

While rate decreases are a trend we’ve witnessed across the board, a more specific trend to  emerge in recent months has been discounting for borrowers with lower LVR’s (loan to value ratios).

 In the past, lenders have typically offered lower rates on loans with LVRs below 80%, but as Marshall explains, a trend of heavier discounting for even lower LVRs has taken place of late. 

“One of the things we’re aware of and that we’ve picked up recently is this trend towards discounts on loans which have an LVR of less than 60%-70%,” he said. 

“That’s mostly looking at attracting refinancers - people who have had a loan for a while and have already paid some of it. So the lenders are being super sharp for those kinds of borrowers.”

So, just how sharp are some of the rates out there for owner-occupiers? Here’s a snapshot of the lowest variable and fixed rates in the Mozo database, based on a $400,000 loan (P&I repayments) being paid off over 30 years. 

Fixed rate market leaders - 7 August, 2020

TermRate leaderFixed rate
1-yearHomestar1.98% (2.51% comparison rate*)
2-yearCommunity First Credit Union1.99% (3.25% comparison rate*)
3-yearUBank2.14% (2.41% comparison rate*)
4-yearHSBC2.40% (3.13% comparison rate*)
5-yearING & Police Bank2.59% (3.52% & 2.79% comparison rates*)

Lowest variable rates - 7 August, 2020

LoanVariable rate
Reduce Home LoansSuper Saver Variable2.19% (2.19% comparison rate*)
Well Home LoansWell Balanced2.32% (2.35% comparison rate*)
HomestarStar Essentials Home Loan2.39% (2.42% comparison rate*)

Home loan rates for investors

  • Fixed rates cut hardest
  • Lowest variable rates below 2.70%; fixed rates under 2.30%

It’s not only owner-occupier home loan rates that have fallen steadily in 2020 - we’ve witnessed the same trend with investment loan rates as well, and once again the most dramatic movements have been in the fixed category.

Since January, the average^ rate for investors making principal and interest repayments has decreased by: 27 basis points (variable rates), 66 basis points (1-year fixed rates) and 54 basis points (3-year fixed rates).

As Marshall notes, the downward rate trend has applied to all types of loans, but borrowers looking for the best deals really need to be thinking about fixing their loans.

“We’ve witnessed lenders apply cuts for all borrower and loan types, but investors in particular should really be checking out the fixed rates around at the moment because they can be significantly lower than variable rate offers,” he said.

“It’s not all that surprising because investor rates have had a bit of a premium built into them for a while and it looks like that premium is being reduced a little. But if you’re not shopping around at the moment you’re probably not on the best rate, no matter what kind of borrower you are.”

So with that said, what does the sharpest end of the market look like for investors? 

Here’s a snapshot of the lowest variable and fixed rates currently available for investors in the Mozo database, based on a $400,000 loan (P&I repayments) being paid off over 30 years. 

Investor fixed rate market leaders - 7 August, 2020

TermRate leaderFixed rate
1-yearUBank2.29% (3.47% comparison rate*)
2-yearQueensland Country Bank2.29% (3.84% comparison rate*)
3-yearUBank2.29% (2.74% comparison rate*)
4-yearHSBC2.69% (3.22% comparison rate*)
5-yearUBank2.74% (2.83% comparison rate*)

Lowest investor variable rates - 7 August, 2020

LoanVariable rate
Easy StreetStandard Variable Home Loan - New Money Offer2.59% (2.63% comparison rate*)
Credit Union SAVariable Rate Home Loan Special Offer2.69% (3.12% comparison rate*)
Reduce Home LoansInvestor Rate Lovers Variable2.69% (2.74% comparison rate*)

For more information about the latest home loan rate changes plus changes to credit cards, personal loans, savings accounts and term deposits, check out the July edition of the Mozo Banking Roundup

Or take a look forward by checking out our latest article on the property market trends to expect in the rest of 2020. 

^Just a note on the averages used in this article. For this particular exercise the averages used only consider the single best rate from each provider for each type of borrower, rather than all rates on offer. And all rates are based on a loan amount of $400,000 and an LVR of 80%. For the latest averages of all rates in the Mozo database, visit our home loan statistics page.

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 473 home loans.
Last updated 19 June 2024 Important disclosures and comparison rate warning*
  • 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.

  • 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.

  • 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.

  • Discount Variable Home Loan

    • Owner Occupier
    • LVR<70%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.01 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

  • Variable Home Loan 90

    • Principal and Interest
    • LVR <90%
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.06 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

  • 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.

  • The Better Home Loan Special Offer

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

    Enjoy a variable rate home loan with a bunch of features from Police Credit Union. Make extra repayments at any time without penalty. No monthly, annual or upfront fees. Free online redraw. Minimum 20% deposit. Qualifying criteria applies. Minimum loan amount is 200K. For new customers only. Mozo Experts Choice Home Lender Credit Union of the Year 2023.

  • 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.

  • 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.

  • 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?

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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. 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.

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