May home loan snapshot: Longer term fixed rates are rising

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Six months have now passed since the Reserve Bank cut the official cash rate in November 2020 - a move which paved the way for the hundreds (if not thousands) of fixed home loan rate cuts we’ve witnessed ever since.

According to the latest edition of the Mozo Banking Roundup though, that one-way trend appears to be at an end. At least, when it comes to long-term fixed rates.

So which lenders have increased their rates, who has cut rates and what’s happening to variable rate home loans? Read on to find out.

Divergence in fixed rates beginning to show

In early April we reported that signs were appearing that some fixed rates were on their way back up. Well, that idea has only been reinforced since, as 15 lenders in the Mozo database increased at least one 4 or 5-year fixed home loan rate during April (many lifted both).

Bankwest, Bank of Melbourne, St.George and Westpac were among the lenders to have hiked at least some fixed rates in recent weeks.

As a result of the increases, the 4 and 5-year fixed loan averages for owner occupiers in our database also ticked up. The average 4-year fixed rate is now 2.46% (nine basis points up on last month) while the 5-year fixed average is now 2.68% (five basis points higher).

It’s a totally different story with our 1, 2 and 3-year fixed rate averages though - all of which have dropped slightly month-on-month.

Cuts from a number of lenders helped drive these averages down over the month, but among the more significant changes was bcu’s decision to shave 31bp off the 1-year fixed rate on its Fixed Rate Home Loan. The new rate of 1.67% (3.85% comparison rate*) for owner occupiers is now the lowest in our database for that term.

So bcu’s new rate sits atop our charts for 1-year fixed rate terms, but how about other terms? Here’s a snapshot of the lowest fixed rates in our database, plus our averages:

Average and lowest fixed rates - Mozo database (May 1, 2021)^^

TermRate leaderFixed rateAverage
1-yearbcu1.67% (3.84% comparison rate*)2.33%
2-yearHomestar1.74% (2.23% comparison rate*)2.29%
3-yearCredit Union SA1.75% (2.22% comparison rate*)2.32%
4-yearBankVic1.95% (2.72% comparison rate*)2.46%
5-yearING2.19% (3.37% comparison rate*)2.68%

Variable rate changes few and far between

As has become the trend, there have been relatively few changes to variable rate home loans. Still, there were enough cuts to push the variable rate average in our database for owner occupiers down to 3.27% (three basis points lower than last month).

Bank of Sydney reduced the variable rate on its Expect More Home Loan (Package) by 10bp to 2.29% (2.31% comparison rate*), making it the lowest offer from a bank lender in our database available to owner occupiers (<80% LVR).

Meanwhile, ANZ cut up to 90bp off its Variable Rate (Breakfree Package) offer and Bank Australia cut up to 50bp off its Basic Home Loan offer.

At the lowest end of the variable rate market, competition continues to remain strong. 31 lenders in our database currently have a headline rate below 2.50% for owner occupiers, though as the following table shows, online lenders are maintaining their grip on many of the lowest variable rates^^ available:

Lowest variable rates - Mozo database (May 1, 2021)^^

Variable rateLenderLoan
1.99% (2.05% comparison rate*)Reduce Home LoansSuper Saver Variable
2.09% (2.09% comparison rate*)Pacific Mortgage GroupStandard Variable
2.14% (2.19% comparison rate*)HomestarStar Essentials
2.17% (2.17% comparison rate*)FreedomLendVariable Home Loan
2.17% (2.20% comparison rate*)Well Home LoansWell Balanced

RELATED: Gateway Bank introduces monthly LMI option for low deposit home buyers

Thinking about locking in a rate while the going’s good? Check out some of the competitive fixed rate offers in the table below, or take a trip over to our fixed rate comparison tables to browse through more deals from an even larger range of lenders.

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

Home loan comparisons on Mozo

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can search our database of 472 home loans using the filters below.
Last updated 14 July 2024 Important disclosures and comparison rate warning*
  • Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Lock in a competitive interest rate and enjoy peace of mind for the fixed period. Available for owner occupied new and refinanced home loans with at least 20% deposit. Split option available as well as offset and redraw. Noapplication, ongoing or banking fees. Third Party fees may be applicable - payable within loan repayments. Extra repayments up to $20K per annum permitted. Apply online, 100% member owned credit union.

  • Fixed Rate Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Fixed 3 years
    Comparison rate
    6.15 % p.a.
    Initial monthly repayment
    $3,027

    Additional repayments of up to $10K per fixed year. Interest rate discounts available. Waiver of $499 application fee when combined with an Orange Advantage Home Loan.

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR<70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.20 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.42 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.59 % p.a.
    Fixed 3 years
    Comparison rate
    7.06 % p.a.
    Initial monthly repayment
    $3,190

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

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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.