Home loan rate jump sparks rush to fix rates

father at computer looking at home loans

Australians have had a good run with ultra-low home loan rates this year. But now’s not the time to get complacent. Recent home loan rate increases across the Big Four banks are leaving Aussie borrowers wondering if now is the time to lock in their rates.

Take the National Australia Bank (NAB), which last week increased its interest rates across 2, 3 and 4-year fixed rate terms on the NAB Tailored Home Loan and Tailored Home Loan (Choice Package) products. This followed similar moves by ANZ and Westpac earlier this year. So what should your next move be?

Although a statement from the Reserve Bank says the cash rate will not increase until 2-3% inflation is achieved, which is “unlikely until 2024 at the earliest”, the major banks are already tinkering their numbers.

So, when it comes to locking in a home loan rate, now could be the time to act.

If you’re looking to jump on current interest rates, check out Mozo’s Editor picks below for comparisons of the top new rates on the market.

Compare 1-year fixed rate home loans

UBank UHomeLoan (1 Yr Fixed)
  • 2021 Mozo Experts Choice Award winner for best Split Home Loan and Investor Fixed Home Loan^
  • 1-year fixed rate of just 1.99% p.a. interest rate (2.33% p.a. comparison rate*)
  • Choose a payment schedule

UBank is an online bank backed by NAB and the 2021 Mozo Expert Choice Award Winner for best Split Home Loan and Investor Fixed Home Loan^. UBank’s UHomeLoan (1 Year Fixed) currently offers a competitive 1.99% p.a. interest rate (2.33% p.a. comparison rate*) 1-year fixed rate. This loan offers flexible repayment options. Although, keep in mind, UBank does charge a $395 application fee (This fee is waived for fixed rate loans that settle on or between 10 July 2020 and 30 September 2022), and does not have redraw facilities.

86 400 Own Home Loan
  • 1 year fixed rates from 1.84% p.a. (2.63% comparison rate*)
  • Rate lock feature
  • Free redraws
Find out more

86 400 is one of Australia’s pioneering neobanks, winning two 2021 Mozo Experts Choice Home Loan Awards^ in the Low Cost and Investor Home Loan categories. The 86 400 Own Home Loan (Fixed) comes with some of the lowest rates in the Mozo database, with the 1 year fixed rate of 1.84% p.a. (2.63% comparison rate*)  for owner occupiers with an LVR under 60%, making principal and interest repayments particularly noteworthy. Keep in mind that, with this loan, there is a $250 upfront fee and a $250 annual service fee.

Compare 2-year fixed rate home loans

HSBC Fixed Rate Home Loan
  • Cashback offer for refinancers (conditions apply)
  • Low 2 year fixed rate of 2.09% p.a. (3.03% p.a. comparison rate*)
  • Flexible payment options

The Fixed Rate Home Loan from HSBC features seriously low fixed rates of 2.09% p.a. (3.03% p.a. comparison rate*) as well as the ability to pay on a weekly, fortnightly or monthly schedule. The HSBC Fixed Rate Home loan is available for amounts from $50,000 to $7,500,000.

Virgin Money Special Offer Reward Me Fixed Rate Home Loan
  • Competitive fixed rates from 1.98% p.a. (2.66% p.a. comparison rate*) for 2-year term
  • Extra repayments (capped at $10k p.a)
  • Choose your own payment schedule
Find out more

Borrowers can get particularly competitive fixed rate deals, with interest rates that start as low as 1.98% p.a. (2.66% p.a. comparison rate*) for 2-year fixed terms, on a loan of at least $300,000 with an LVR below 80%. The Virgin Money Special Offer Reward Me loan also offers the chance to make free extra repayments towards their loans of up to $10,000 a year, on a weekly, fortnightly or monthly basis. Also to keep in mind - the loan does come with a $300 application fee, a $450 upfront fee and a $10 monthly service fee. Additionally, it does not have a redraw facility.

Compare 3-year fixed rate home loans

UBank UHomeLoan (3-Yr Fixed)
  • 2021 Mozo Experts Choice Award winner for best Split Home Loan and Investor Fixed Home Loan^
  • 3-year fixed rate of just 1.85% p.a. (2.24% p.a. comparison rate*)
  • Choose your own payment schedule

The UBank UHomeLoan fixed 3 year rate is 1.85% p.a. (2.24% p.a. comparison rate*). The fixed rate UHomeLoan has a $395 application fee (waived for fixed rate loans that settle on or between 10 July 2020 and 30 September 2022) and does not have a redraw facility. You can borrow up to 80% of the property value and the loan is available for loans from $100,000 up to $2,000,000. The loan allows for extra repayments, capped at $20,000 within the fixed period.

Qudos Bank Fixed Rate Home Loan
  • Fixed rates from 1.99% p.a. (2.59% p.a. comparison rate*)
  • Flexible payment options
  • Free extra repayments (up to $10,000 per year)

Qudos Bank offers competitive fixed rates starting from 1.99% p.a. (2.59% p.a. comparison rate*) for the 3-year option loan of at least $300,000 with an LVR below 80%. Additionally, borrowers can pay on a weekly, fortnightly or monthly basis. Keep in mind that there is no redraw facility, which means that if you make extra repayments, you won’t be able to make any withdrawals.

Great Southern Bank Fixed Rate Loan
  • 3-year fixed rates from 1.97% p.a. (3.86% p.a. comparison rate*)
  • Extra repayments up to $5,000 during fixed rate term
  • Free redraws
Find out more

Great Southern Bank is one of the largest customer-owned financial services provider in the country. The Great Southern offers 3-year fixed loan rates as low as 1.97% p.a. (3.86% p.a. comparison rate*), on a loan between $10,000 and $5,000,000 with an LVR below 95%. Borrowers can take out this loan with as little as a 5% deposit. The Great Southern Bank Fixed Rate Loan also allows for free redraws, but carries a hefty upfront fee of $835, an application fee of $600 and repayments can only be made monthly.

* 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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