Is now the right time to fix your home loan?
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.
“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 - last updated 19 March 2024
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Featured Product
Ultra Low Rate <95% LVR
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.30% p.a. variable6.58% p.a.Only 5% deposit required to apply. Low upfront costs to pay. No LMI Required. Unlimited Redraw and additional repayments. No Application or ongoing fees. No guarantors or equity sharing required.
CompareCompareUltra Low Rate <95% LVR
Only 5% deposit required to apply. Low upfront costs to pay. No LMI Required. Unlimited Redraw and additional repayments. No Application or ongoing fees. No guarantors or equity sharing required.
- interest rate
- 6.30% p.a. variable
- comparison rate
- 6.58% p.a.
- interest rate
- 6.30% p.a. variable
- comparison rate
- 6.58% p.a.
- Upfront fees
- $790
- Ongoing fees
- $0.00
- Discharge Fee
- $795.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $350,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Sucasa Ultra Low Rate <95% LVR
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Owner Occupier, Refinance Only, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable5.90% p.a.For refinancers only. 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 in as little as 10 minutes.
CompareCompareUnloan Variable
For refinancers only. 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 in as little as 10 minutes.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
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Straight Up
Obliterate, Owner Occupier, Principal & Interest, <50% LVR
interest rate
comparison rate
Initial monthly repayment6.24% p.a. variable6.24% p.a.Get a low variable rate depending on your deposit with Athena’s Straight Up Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.
CompareCompareStraight Up
Get a low variable rate depending on your deposit with Athena’s Straight Up Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.
- interest rate
- 6.24% p.a. variable
- comparison rate
- 6.24% p.a.
- interest rate
- 6.24% p.a. variable
- comparison rate
- 6.24% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 50.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- $2,500,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Athena Straight Up
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Neat Home Loan
Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.16% p.a.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.
CompareCompareNeat Home Loan
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.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- Upfront fees
- $250
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $80,000
- maximum borrowing amount
- $5,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the ubank Neat Home Loan
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Mozo experts choice awards won:
- Fixed Rate Home Loan - 2024
- Investor Fixed Home Loan - 2024
Fixed Rate Home Loan
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment5.99% p.a.
fixed 2 years6.24% p.a.Secure a low rate and enjoy the certainty of repayments, with the BCU Fixed Rate Home Loan. Save with no ongoing annual fees. Pay up to $25,000 extra during a fixed period (T&Cs apply). Lock in for up to 5 years.
CompareCompareFixed Rate Home Loan
Secure a low rate and enjoy the certainty of repayments, with the BCU Fixed Rate Home Loan. Save with no ongoing annual fees. Pay up to $25,000 extra during a fixed period (T&Cs apply). Lock in for up to 5 years.
- interest rate
- 6.29% p.a.
fixed 3 years
- comparison rate
- 6.30% p.a.
- interest rate
- 6.29% p.a.
fixed 3 years
- comparison rate
- 6.30% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $395.00
- Extra repayments
- yes, up to $25,000 during fixed period - fee applies
- Redraw facility
- no
- Offset account
- no
- Maximum loan to value ratio
- 95.00%
- minimum borrowing amount
- $20,000
- maximum borrowing amount
- $2,500,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the BCU Bank Fixed Rate Home Loan
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Straight Up
Obliterate, Investor, Principal & Interest, <50% LVR
interest rate
comparison rate
Initial monthly repayment6.34% p.a. variable6.34% p.a.Investors get a low variable rate depending on your deposit with Athena’s Straight Up Investor Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.
CompareCompareStraight Up
Investors get a low variable rate depending on your deposit with Athena’s Straight Up Investor Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.
- interest rate
- 6.34% p.a. variable
- comparison rate
- 6.34% p.a.
- interest rate
- 6.34% p.a. variable
- comparison rate
- 6.34% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 50.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- $2,500,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Investor
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Athena Straight Up
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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.
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.