Is now the right time to fix your home loan?

Ceyda Erem

18 Jan 2019

Fix home loan content

To fix or not to fix that is the question - or at least it’s the question on the mind of both current and prospective Aussie homeowners.

If you’ve been keeping up with all the latest in home loan news, then you probably know that three of the big four banks hiked variable rates across the board last year, pushing many homeowners into the arms of smaller players and challenger lenders.

“Online lenders have been giving the big banks a run for their money for a while now and with the majority of the big four increasing their rates, it’s put a bad taste in the mouths of customers,” said Mozo Product Data Manager, Peter Marshall.

RELATED: RBA rate cut on the cards for 2019 as BOQ, Virgin Money hike home loan rates

And while the home loan market continues to remain rocky, Aussies looking to purchase their first home this year may be wondering whether or not to fix their mortgage to protect themselves from potential future hikes.

However, while fixing your home loan might sound like the right way to go, according to Marshall, unless you’re in it for the long haul, it might not make that much of a difference.

“If you’re after certainty or the assurance that your rate won’t change, then a fixed rate could be a good option - but you might have to pay a premium for it,” he said.

“Lenders have started to price in a potential cut to the cash rate this year, particularly for their longer term rates, so if you're after certainty in your repayments over the longer term there are some sharp deals around.”

And with Bank of Queensland and Virgin Money kicking off the year with steep rate hikes, Marshall is predicting that the RBA may act soon and cut rates.

RELATED: Is 2019 the year to ditch the big banks in search of a better home loan?

“I wouldn’t be surprised if the RBA cut rates in the first half of the year. This would mean the banks could hold on to some of the cash rate cuts to make up for increased funding costs, which should mean less pain for borrowers,” he said.

“But I can’t see lenders rushing to slash variable rates any time soon, and if they do pass on the cut, it won’t be by much. So if the RBA wants to provide relief for borrowers as well, a second cut could be on the cards.”

Smaller lenders shaking up the market

At the moment, the average variable rate for a basic loan without an offset account for the big four banks is 3.89%. That compares to the lowest comparable variable rate in the Mozo database - Reduce Home Loans’ Rate Lovers product - of 3.44%, making challenger lenders a hot pick for Aussie buyers.

RELATED: 5 New Year's resolutions for first home buyer success in 2019

To put that into perspective, say you took out a $300,000 to be repaid over 30 years on the average big bank rate of 3.89%. According to the Mozo repayment calculator, your monthly repayments would clock in at $1,413. But if you were to take out the same loan on the Reduce rate of 3.44%, your repayments would drop to $1,337 - a yearly saving of $912.

If you’re now thinking a variable rate could be right for you, check out our list down below or head over to our home loan comparison tool.

6 home loans for 2019

Rates updated daily. Advertiser disclosure.

  • loans.com.au
    Mozo Expert Choice Badge" style="width:60px;">

    1.99% p.a.variable for 12 months and then 2.48% p.a. variable

    2.47% p.a.

    $1234

    Product details Close details
    Smart Booster Home Loan

    1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    1.99% p.a.variable for 12 months and then 2.48% p.a. variable

    2.47% p.a.

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.

    Smart Booster Home Loan

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.

    • 1.99% p.a.variable for 12 months and then 2.48% p.a. variable

    • 2.47% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • Optional - with 0.10% additional interest

    • $520

    • 80.00%

    • $50,000

    • $1,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Smart Booster Home Loan

    Details Close

  • UBank

    1.75% p.a.
    fixed 3 years

    2.22% p.a.

    $1234

    Product details Close details
    UHomeLoan

    Owner Occupier, Principal & Interest

    1.75% p.a.
    fixed 3 years

    2.22% p.a.

    $0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

    UHomeLoan

    $0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

    • 1.75% p.a.
      fixed 3 years

    • 2.22% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free up to $20,000 p.a.

    • no

    • no

    • $0

    • 80.00%

    • $100,000

    • $2,000,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • $395 Establishment fee waived for fixed rate loans that settle by 30 September 2022. Receive 1.75% 3 year fixed rate when you apply by 29 April 2021 and settle within 90 days.

    Read our Mozo Review to learn more about the UHomeLoan

    Details Close

  • Macquarie

    2.09% p.a.
    fixed 3 years

    2.43% p.a.

    $1234

    Product details Close details
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    2.09% p.a.
    fixed 3 years

    2.43% p.a.

    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

    Basic Home Loan

    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

    • 2.09% p.a.
      fixed 3 years

    • 2.43% p.a.

    • $0

    • $0.00

    • $400.00

    • yes - free

    • yes - free

    • no

    • $0

    • 70.00%

    • $150,000

    • $750,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Monthly

    Read our Mozo Review to learn more about the Basic Home Loan

    Details Close

  • Athena
    Mozo Expert Choice Badge" style="width:60px;">

    2.19% p.a. variable

    2.19% p.a.

    $1234

    Product details Close details
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    2.19% p.a. variable

    2.19% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.

    Celebrate Variable Home Loan

    Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.

    • 2.19% p.a. variable

    • 2.19% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • $0

    • 60.00%

    • $100,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Celebrate Variable Home Loan

    Details Close

  • Tic:Toc

    1.89% p.a.
    fixed 2 years

    2.15% p.a.

    $1234

    Product details Close details
    Fixed Home Loan

    Owner Occupier, Principal & Interest

    1.89% p.a.
    fixed 2 years

    2.15% p.a.

    Award-winning low rate home loan that could save you thousands. No application or ongoing fees, fee-free redraws, unlimited additional repayments and an optional offset account for $10/month. Minimum 10% deposit. Winner of Mozo’s Experts Choice Award for Online Home Lender of the Year 2021.^

    Fixed Home Loan

    Award-winning low rate home loan that could save you thousands. No application or ongoing fees, fee-free redraws, unlimited additional repayments and an optional offset account for $10/month. Minimum 10% deposit. Winner of Mozo’s Experts Choice Award for Online Home Lender of the Year 2021.^

    • 1.89% p.a.
      fixed 2 years

    • 2.15% p.a.

    • $0

    • $0.00

    • $325.00

    • yes - free, up to $20,000 p.a.

    • yes - free

    • Optional - $10 per month

    • $0

    • 90.00%

    • $50,000

    • $2,000,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Fixed Home Loan

    Details Close

  • Well Home Loans
    Mozo Expert Choice Badge" style="width:60px;">

    2.17% p.a. variable

    2.20% p.a.

    $1234

    Product details Close details
    Well Balanced

    Owner Occupier, Principal & Interest, LVR <80%

    2.17% p.a. variable

    2.20% p.a.

    Well Balanced home loan is a low rate home loan with free online redraw and no valuation fee. Purchase, Refinance or Equity Release purposes allowed. Offset Home Loan winner in the Mozo Expert's Choice Award for 2021.

    Well Balanced

    Well Balanced home loan is a low rate home loan with free online redraw and no valuation fee. Purchase, Refinance or Equity Release purposes allowed. Offset Home Loan winner in the Mozo Expert's Choice Award for 2021.

    • 2.17% p.a. variable

    • 2.20% p.a.

    • $785

    • $0.00

    • $300.00

    • yes - free

    • yes - free

    • Optional - $10 per month

    • $785

    • 80.00%

    • $200,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Well Balanced

    Details Close

^See information about the Mozo Experts Choice Home loans Awards