Home loan rate check: How do ANZ, CBA, NAB and Westpac compare?

If you’ve got a home loan, there’s a good chance it’s with one of the big four banks. According to data from APRA, ANZ, Commonwealth Bank, NAB and Westpac control roughly 77% of the residential mortgage market.

But do these lenders offer the most competitive interest rates? We take a look at how the major banks stack up against the rest of the market, and where opportunities exist for Australians to save money by switching.

Behind the pack on variable rates

Though the RBA has left official interest rates on hold since November 2020, we’ve seen variable rates continue to fall throughout the year. Among lenders we track, the average variable rate for owner occupiers currently sits at just 3.14% p.a. 

Despite all those out-of-cycle cuts, however, there hasn’t been much activity from the major banks. Since September last year, there have been just two variable rate reductions from the majors — one by ANZ and one by Westpac.

That reluctance to offer customers relief has left the average big four owner occupier variable rate sitting at 3.50% p.a. — 36 basis points above our database average.

To be sure, there is still value to be found among the majors. For example, Westpac’s Flexi First Option comes with a 2.09% variable rate, which is available for 24 months before reverting to 2.59% p.a. (2.52% p.a. comparison rate*). 

But we count 92 lenders in our database with variable rates below 2.50% p.a., some with rates as low as 1.88% p.a. (1.97% p.a. comparison rate*), meaning many mortgage customers with the big banks could be paying much more than they need to be.

Major banks vs Mozo database - 23 September 2021

Note: The variable home rates in the table above are for owner occupiers making principal and interest repayments on a loan amount of $400,000 over 20 years with an LVR <80%. 

As the table shows, by refinancing from a variable rate of 3.50% p.a. to a lower rate of 3.14% p.a., a borrower could reduce their monthly repayments by $72 and save around $17,594 in interest over the life of their loan.

Of course, that’s based on the specific scenario outlined above, but you can crunch your own numbers using our mortgage repayments calculator.

Keeping pace on fixed rates

Since the RBA began its bond purchasing program last year, fixed rates have overtaken variable rates as the cheaper option of the two. That fact has not been lost on the scores of borrowers who have rushed to fix their loan.

And in this area, the major banks haven’t been so stingy. For example, rates on CBA’s Fixed Rate Home Loan (Wealth Package) and NAB’s Tailored Home Loan (Fixed, Choice Package) are among the lowest in our database across a number of terms.

In fact, when compared against the average fixed rates among all lenders we track, the big four banks come out on top for 1, 2, 3 and 4-year terms.

Major banks vs Mozo database - 23 September 2021

Note: The fixed home rates in the table above are for owner occupiers making principal and interest repayments on a $400,000 loan with an LVR <80%. 

As the table above demonstrates, however, there are even lower fixed rate home loans on the market, so if you’re thinking about locking in a rate it’s worth doing your research and comparing offers from different lenders.

To start, make sure to visit our refinance home loan page, where you’ll be able to filter your search by rate and type, or browse some of the offers below.