July home loans snapshot: Fresh market leaders emerge as rates hit new bottom

By Tom Watson ·

Just when the market appeared to be quietening, some seismic shifts at the lower end of the home loan market have changed the rate landscape once again according to the latest edition of the Mozo Banking Roundup. 

Mozo figures reveal that both fixed rates and variable rates continued to slide during June, with new rate leaders emerging in both categories in the past two weeks. 

So where do rates sit now, and what can we expect in the month ahead? Here’s our July snapshot.

A fixed rate below 2.00%

Perhaps most significant of all was the monumental change from Bank of us earlier this week, whose new fixed rate FlexiDiscount Home Loan offer crashed through the 2.00% barrier! 

Compare home loans - last updated January 23, 2021

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • Special Offer Fixed Rate Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a.
    fixed 3 years
    2.70% p.a.

    Limited time 3 Year Fixed Rate Special Offer for purchase or refinance. Rate lock option available. No monthly or ongoing fees.

    Compare
    Go to site
    Details
  • mozo-experts-choice-2020
    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.75% p.a.
    fixed 3 years
    2.22% p.a.

    $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

    Compare
    Go to site
    Details
  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    2.19% p.a.
    fixed 3 years
    2.53% p.a.

    Flexible loan structure – create up to six loan accounts with different rate and repayment types. Free redraw from your loan using Macquarie Online.

    Compare
    Go to site
    Details
  • Fixed Home Loan Special Offer

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.19% p.a.
    fixed 3 years
    3.03% p.a.

    No monthly account keeping fees & No loan establishment fee. Get up to $3,000 cash bonus when you refinance with an eligible Suncorp Bank Home Loan. T&Cs & eligibility criteria apply.

    Compare
    Go to site
    Details
  • Discount Fixed Rate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a.
    fixed 4 years
    2.90% p.a.

    Have the certainty of fixed repayments with a competitive rate from BOQ. Flexible repayment options available and make up to $5,000 in additional repayments annually. $3,000 cashback when you refinance your home loan to BOQ (min. $250k lending, max 80% LVR, T&Cs apply).

    Compare
    Details
placeholder

Talk to a Mozo home loans expert

Buying your first home, refinancing your existing home or thinking of investing? Speak to Steve, our home loans expert today!

Get Started

The limited time offer has a fixed rate of just 1.99% for 1, 2 and 3-year terms with comparison rates* of 2.78%, 2.71% and 2.64% respectively. Though it’s only available to Tasmanians.

Among other notable fixed rate changes:

  • Homestar launched a super low 2-year fixed rate of 2.06% (2.49% comparison rate*) with its Star Essentials Fixed Home Loan
  • NAB cut 10 basis points off a number of fixed loans meaning its most competitive rate is now 2.19% (4.02% comparison rate*) for 2 years. 
  • ING was one of the few lenders to increase, lifting fixed rates by 5 to 40 basis points. However, ING is still among the most competitive lenders with rates as low as 2.19% (3.79% comparison rate) for 2 years with its Fixed Rate Loan. 

So what do fixed rates look like? Here are the five database-leading rates and our fixed rate averages as of July 1, 2020:

Term
Rate leader
Fixed rate
Average
1-year
Bank of us
1.99% (2.78% comparison rate*)
2.61%
2-year
Bank of us
1.99% (2.71% comparison rate*)
2.56%
3-year
Bank of us
1.99% (2.64% comparison rate*)
2.63%
4-year
HSBC
2.40% (3.13% comparison rate*)
2.99%
5-year
RACQ
2.49% (3.76% comparison rate*)
2.98%

Online lenders drive variable rates down  

Lenders have also continued to drop their variable home loan rates recently, though less dramatically. As of today the average variable rate in the Mozo database for owner occupier loans sits at 3.42% - a slight decrease on the June 1 average of 3.43%.

The big story of the month came from online lender Reduce Home Loans which cemented its spot as the variable rate leader in our database with the introduction of its Super Saver Variable home loan with a rate of just 2.19% (2.19% comparison rate*).

To put the Super Saver Variable rate into perspective, it’s currently 20 basis points below its nearest competitors and a considerable 123 basis points below the our average. 

In other notable variable rate changes: 

  • Fellow online lender Freedomlend trimmed 10 basis points off its Variable Home Loan taking it to 2.39% (2.39% comparison rate*) and among the five lowest variable lenders in our database. 
  • ING cut 19 basis points off its Orange Advantage (Package) loan to 2.64% (2.98% comparison rate*) which makes it one of the lowest packaged offers on the market. 
  • NAB took 15 basis points off its Base Variable Home Loans Special, which now sits at 2.69% (2.69% comparison rate*). That’s the lowest of the comparable big four offers. 

The outlook ahead

So with a host of recent changes, including two new market leading offers, can we expect mortgage rates to continue their decline in July? 

According to Mozo Banking Expert, Peter Marshall, competition among lenders will remain fierce, with some extra sweeteners likely to be thrown at borrowers - particularly those looking to refinance. 

“I think there's going to continue to be a lot of competition out there, but it seems to me that rates are probably very close to as low as lenders would want to take them,” he said. 

“So I think we're more likely to see things such as cash back offers. So one-off bonuses to attract people's business rather than direct rate discounting. Having said that, sure there will be the occasional lender who will put a new rate out there but I don't think it'll be widespread.”

RELATED: Bank of Us and Homestar take fixed mortgage rates to new lows

All this rate talk left you itching to refinance your own mortgage or compare even more offers? Get started with some of the hottest rates around in the table below, or check out the Mozo home loans comparison tables for the latest rates from over 80 different lenders

^See information about the Mozo Experts Choice Home Loans 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.