May home loans snapshot: Lenders quietly cutting fixed rate home loans

The Reserve Bank’s relentless rate hike campaign — which commenced in May last year and has brought the cash rate to its highest level since 2012 — paused last month. Giving homeowners a temporary reprise from watching their monthly mortgage repayments increase. 

Several economists at the big four banks predict the end of rate hikes is nigh and expect to see one more increase before remaining the same for an extended period. 

Many lenders seem to follow a similar thought process as they’ve begun quietly slashing long term fixed rates by 30 or more basis points (bp). Mozo’s database saw 918 fixed rate decreases in April alone.

A restoration of confidence and lower rates will help slow the property downturn, as more Australians decide to take the plunge and enter the market. But what do mortgage rates look like at the moment? Below, we look at where fixed and variable rates currently sit.

Fixed home loans now average above a ‘5’

The ultra-low fixed rates many had gotten accustomed to during the pandemic period have long disappeared. These days, most fixed rates begin with a ‘5’ and just one in Mozo’s database starts with a ‘4’. 

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

• 1-year: 5.75% p.a.
  
• 2-year: 5.90% p.a.
  
• 3-year: 5.96% p.a.
  
• 4-year: 6.27% p.a.
  
• 5-year: 6.34% p.a.

Recent home loan rate movements

Variable rate home loans

• Regional Australia Bank reduced its Partnership Advantage
  Package rates by 28bp, now starting from 5.49% p.a. (5.84% p.a. comp
  rate*).
• ANZ decreased the discount on lower loan to value ratio tiers of the
• Simplicity PLUS home loan - increasing rates by 10bp for LVRs up to
  80%, now from 5.54% p.a. (<60% LVR, 5.55% p.a. comp rate*).
• Commonwealth Bank increased Standard Variable Wealth
  Package rates for LVRs up to 80% by 3-12bp, now from 5.44% p.a. (<60%
  LVR, 5.82% p.a. comp rate*).

Fixed rate home loans

• NAB cut fixed rates by 15-60bp this month across borrower types,
  with 3-5 year terms decreased by higher amounts.
• ANZ decreased 3 year fixed rates by 60bp for Owner Occupiers
• paying principal and interest and 50bp for other borrowers.
• Bank of Queensland made significant cuts (25-90bp), along with
• ME (19-80bp), and Virgin Money (20-70bp). All have a leading 3
  year rate of 5.24% p.a. (5.68% p.a., 5.78% p.a., 5.48% p.a., respective comp rates*).

Current lowest home loan rates

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

Lowest variable rates — Mozo database (May 1, 2022)^^

Lowest and average fixed rates — Mozo database (May 1, 2022)^^

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

Thinking about buying a 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.