May home loans snapshot: HSBC and ING emerge as new fixed rate leaders

By Tom Watson ·
Advertiser disclosure

In good news for Australian borrowers and refinancers, the recent downward trend in home loan interest rates has continued, according to new Mozo research released this morning.

Figures from the latest Mozo Banking Roundup reveal that mortgage lenders continued to drop both home loan rates throughout May, but as in previous months, changes to fixed rates largely outweighed those to variable rates. 

Among the most significant recent fixed rate movements, AMP slashed 35 - 185 basis points off select fixed package loan rates while neobank 86 400 cut its own fixed rate offers by between 15 - 25 basis points. 

On the flip side, ANZ increased fixed rates on its Breakfree Package loan by up to 10 basis points, while online lenders Reduce Home Loans and Well Home Loans also increased what were previously rate-leading offers. 

The increases from Reduce and Well now leave HSBC and ING sitting pretty as the rate leaders in the Mozo database in four of five fixed rate terms. Here are the five database-leading fixed rates and the Mozo averages as of June 1, 2020:

TermRate leaderFixed rateAverage
1 yearNewcastle Permanent2.18% (3.83% comparison rate*)3.03%
2 yearHSBC and ING2.09% (3.09% and 3.77% comparison rates*)2.98%
3 yearING2.14% (3.62% comparison rate*)3.01%
4 yearHSBC2.40% (3.13% comparison rate*)3.36%
5 yearING2.54% (3.50% comparison rate*)3.38%

Variable rates trend down

While there was a lower volume of variable home loan rate changes in May compared to fixed changes, cuts continued to flow.

There was a bit of jostling at the most competitive end of the market, with three lenders - Homestar, Reduce Home Loans and Tic:Toc - now offering a variable rate of 2.39% for owner occupiers. That’s currently the lowest in the Mozo database. 

Online lender Homestar has cut its Star Essentials loan by 5 basis points to 2.39% (2.39% comparison rate*) and Tic:Toc shaved 15 basis points off its Variable Home Loan meaning that it also sits at 2.39% (2.40% comparison rate*). 

The Reduce Home Loan Rate Slasher rate of 2.39% (2.40% comparison rate*) remains unchanged. 

As a result of the various rate changes, the average variable rate in the Mozo database (based on a $400k, OO, P&I loan with an 80% LVR) dropped fractionally over the month from 3.44% to 3.43%.

RELATED: Macquarie Bank slashes fixed rates by up to 0.35%

Don’t think your current home loan rate is up to scratch anymore? Find out just how much you could save by using our handy switch and save calculator, or see how it stacks up against some of the hot offers in the table below.

Compare fixed home loans - rates updated daily

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.85% p.a.
    fixed 3 years
    2.24% 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.

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  • placeholder
    Basic Home Loan

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

    interest rate
    comparison rate
    Initial monthly repayment
    2.09% p.a.
    fixed 3 years
    2.32% p.a.

    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.

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    Details
  • placeholder
    Special Offer Reward Me Fixed Rate Home Loan

    Owner Occupier, LVR <80%, 300k+

    interest rate
    comparison rate
    Initial monthly repayment
    1.98% p.a.
    fixed 2 years
    2.66% p.a.

    Enjoy $3,000 cashback when you refinance with Virgin Money (T&Cs apply). Additional repayments up to $10,000 per annum. Reverts to the discounted variable rate on expiry of the fixed term.

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    Details
  • Hot DealReceive $2,000 cashback when refinancing to 86 400 (T&Cs apply)
    placeholder
    Own Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    1.84% p.a.
    fixed 1 year
    2.63% p.a.

    Competitive fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

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    Details
  • placeholder
    Special Fixed Rate Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.89% p.a.
    fixed 2 years
    3.67% p.a.

    Lock in a low fixed rate or choose to split your loan between fixed and variable. Insurance discounts and no fee credit card or zero fee personal loan available. $2,000 cashback offer for home loans over $250k with at least a 20% deposit when refinancing to Newcastle Permanent. Enjoy local branches and call centre.

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    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, loan amount and term entered. 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.

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