January home loan snapshot: New Year, new property market?

Key Points

  • The RBA doesn’t meet in January, so official interest are on hold this month.
  • Most interest rate changes are a New Year’s hangover from 2023.
  • Home values grew 8.1% in 2023 nationally – but this wasn’t the case in every city.
Person thinking about home loan interest rates and the property market in 2024.

Hello 2024, how are you? We’re two days into the New Year and not much has changed in property and home loans since last year – but last year still brings us changes, nonetheless.

For starters, the Reserve Bank of Australia doesn’t meet in January, so home loan interest rates won’t change by much this month. Fallout from last year’s November rate hike may still shake loose some home loan rate changes: we’ll track these as they come in.

The February meeting next month is still live, however, so depending on how inflation fared over the holiday season, we may or may not get another rate hike in 2024. 

In the meantime, the average mortgage size you need to buy a new home boomed in 2023, rising a stellar 8.1% across the country, according to CoreLogic. Will this growth continue?

Let’s get into the first monthly home loan snapshot for 2024.

Home values predicted to rise in 2024 as the property market heats up

The property market may stay hot in 2024, says CoreLogic, though not quite as hot as last year. 2023 saw spectacular growth across national markets, though not every capital city felt it the same.

Housing markets like Sydney (11%), Perth (13%), and Brisbane (15%) saw the greatest booms: a cocktail of tight supply and high demand fueled competition among buyers. 

However, markets like Hobart (-0.8%) and Darwin (-0.1%) saw price falls, so not all cities are created equal. The capital cities were nearly double the price rises in regional Australia, as well. The savvy home buyer might have an opportunity further afield– perhaps for rentvesting.

January home loan interest rates to stay steady – on average

Individual lenders may make adjustments to their interest rates in January 2024, but on the whole, Mozo expects variable rates to stay roughly where they are. 

Special offers like refinance cashback and headline rates may change or even disappear as lenders reassess their financials for the coming year, but these perks aren’t the true value of a mortgage. Home loan costs primarily boil down to long-term rates and the size of your loan amount, so don’t get wooed by honeymoon promises. It’s the heart that matters.

So will interest rates go up in 2024? Most likely, though this highly depends on inflation. The RBA is determined to hike interest rates if inflation remains too high, though most Big Banks expect inflation to fall later this year. A hike could be nearer than we think, but so could the first interest rate cut. Stay tuned.

Fixed rates trend down on longer terms

Fixed home loans have started gradually coming down on longer terms – and we mean gradually. Lenders shifted the averages in the Mozo database down by a few basis points over the course of December for terms between 3-5 years. 

Since fixed rates are predictive, this means lenders expect rates to fall sometime in the future – just not anytime soon. If you’re comparing fixed rates, it’s worth weighing up the security you get now with potential savings you could enjoy in future. 

After all, when rate cuts hit, fixed home loans stay the same. On the other hand, when a rate hike hits, fixed home loans stay the same. 

At the time of writing, these are the average fixed rates for owner occupiers with an 80% LVR and a $400,000 loan:

  • 1-year: 6.54% p.a. 
  • 2-year: 6.47% p.a. 
  • 3-year: 6.44% p.a. 
  • 4-year: 6.62% p.a. 
  • 5-year: 6.65% p.a. 

Current lowest home loan rates

Woman happy to learn about home loan interest rates (abstract art).

Here are the lowest variable and fixed mortgage rates (P&I, LVR <80%) among lenders we track.

Lowest variable rates — Mozo database (2 January 2024)^^

Lender
Loan
Variable rate
Illawarra Credit Union
Bare Essentials Special Offer
5.79% p.a. (5.89% p.a. comparison rate*)
Pacific Mortgage Group
Standard Variable Home Loan
5.89% p.a. (5.89% p.a. comparison rate*)
The Mutual Bank
Special Budget Home Loan
5.89% p.a. (5.90% p.a. comparison rate*)
Community First Bank
Basic Variable Home Loan
5.94% p.a. (5.99% p.a. comparison rate*)

Compare more variable rate home loans

Lowest and average fixed rates — Mozo database (2 January 2024)^^

Term
Rate leader
Fixed rate
1-year
Illawarra Credit Union
5.90% p.a. (7.09% p.a. comparison rate*)
2-year
Australian Mutual Bank
5.53% p.a. (6.30% p.a. comparison rate*)
3-year
Australian Mutual Bank
5.48% p.a. (6.24% p.a. comparison rate*)
4-year
Up
5.80% p.a. (6.02% p.a. comparison rate*)
5-year
Australian Mutual Bank
5.63% p.a. (6.16% p.a. comparison rate*)

The above are the lowest rates in our database for borrowers with an LVR < 80%. More competitive rates are available for borrowers with lower loan-to-value ratios.

If you’re considering buying property or refinancing your existing mortgage, use Mozo’s home loan comparison table to examine lenders side-by-side, or use our refinance calculator to see how much you could save.

^^Interest rates are based on an owner occupier making principal and interest repayments on a $400,000 loan with an 80% LVR. Check out our dedicated Australian home loan statistics page for more information on average mortgage rates.

Compare home loans in the table below.

Compare home loans - last updated 25 February 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    Home Fixed Rate

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    5.80% p.a.
    fixed 3 years
    6.05% p.a.

    Enjoy the security of a competitive fixed interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply). Mozo Experts Choice award winner.

    Compare
    Details
  • Mozo Expert Choice Badge
    Home Variable Rate

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.15% p.a. variable
    6.15% p.a.

    Enjoy a competitive variable interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply) Mozo Experts Choice award winner.

    Compare
    Details
  • Straight Up

    Obliterate, Owner Occupier, Principal & Interest, <50% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.24% p.a. variable
    6.24% 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.

    Compare
    Details

* 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

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