Capped variable home loan makes Australian debut

House mortgaged by Northern Inland Credit Union Capped Home Loan collage

In a unique twist to savings, customer-owned NICU has just debuted its new Capped Home Loan, a variable interest rate home loan designed with rate hikes in mind. The loan has a built-in rate ceiling of 6.04% p.a. (6.39% p.a. comparison rate*) for three years, meaning no matter how much further rates rise, they won’t go beyond that for the capped term.

This unique loan is the first of its kind from the home loan products Mozo currently tracks in our database. Not to mention, the loan is quite competitive. The capped interest rate is 54 basis points lower than the current average variable interest rate in Mozo’s database (6.60%), with the headline rate even lower. 

Reserve Bank rate hikes have contributed significantly to the cost of living, rocketing variable interest rates across Australian home loans in the last year. Borrowers have had to get creative to save interest on their ballooning mortgage repayments, but we have seen too many efforts from lenders to address the problem aside from lifting rates on deposits and offering customer support. 

Not to mention fixed rate home loans are so scarily high they don’t offer much of a reprieve from the tide of rate hikes. And with variable rates rising even when the RBA holds the cash rate steady, what other options do borrowers have?

Enter Northern Inland Credit Union, a customer-owned bank based out of Tamworth, Gunnedah, and Narrabri. Its Capped Home Loan boasts all the features that make variable mortgages useful but with added protection from future rate hikes. Plus, it’s an online home loan, so you don’t need to be located in regional NSW. 

The loan’s features include additional repayments with a free redraw (though there is a minimum redraw of $500) and a 100% offset account. Fees include a $600 establishment fee and a $350 annual fee. 

However, the new offer is a timely reminder to compare your home loan options when buying property. You never know what you can find with little-known lenders, and the best offers aren’t always with the Big Four banks. Could this new style of lending catch on with other lenders?

Mozo banking expert Peter Marshall reminds us that looking out for the little guy can mean savings, especially when the bank’s priority is customer satisfaction first. Besides, a variable rate with a cap can mean greater flexibility than fixing your mortgage. 

“Sure, you can find some fixed rates better than some variable rates, but you’ll be losing flexibility,” says Mozo banking expert Peter Marshall.

“All the fixed rates, both term deposits and home loans, have been jumping up again as the expectation has increased that there will be more RBA rate hikes. But there are still some variable rates better than other variable rates, and people should hunt those down and get them.”

Compare variable home loans in the table below.

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Last updated 20 January 2025 Important disclosures and comparison rate warning*
What are your home loan needs?

Your loan-to-value ratio (LVR): 50%

Loan amount and LVR will affect interest rates.

  • Promoted

    Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Promoted

    OMG Home Loan

    • Owner Occupier
    • Principal & Interest
    • <60% LVR
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

  • Promoted

    Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

  • Promoted

    Basic Variable Home Loan

    • Owner Occupier
    • LVR <60%
    Interest rate
    6.13 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,040
    Go to site

    Competitive interest rate. No ongoing monthly loan maintenance fees. Buy your home with as little as a 5% deposit. You can redraw your repayments if you’re ahead. Choose to repay weekly, fortnightly, or monthly. Make extra payments without penalty, to pay off your home loan even faster.

  • Promoted

    Variable Home Loan 90

    • Principal and Interest
    • LVR <90%
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.08 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

  • Promoted

    Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.03 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Enjoy no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and eligibility criteria apply.

  • Promoted

    Offset Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    100% offset account so you can save on interest and reduce the amount you pay on your home loan. Free redraw. 100% offset account. Only 5% deposit required. No ongoing monthly loan maintenance fees to pay. Tiered interest rates so you can benefit from a lower rate when you borrow less.

  • Promoted

    Offset Variable Home Loan

    • Principal & Interest
    • LVR <60%
    Interest rate
    6.34 % p.a.
    Variable
    Comparison rate
    6.37 % p.a.
    Initial monthly repayment
    $3,108
    Go to site

    Competitive interest rate. 100% offset account so your savings can reduce the amount of interest you pay on your home loan. No ongoing monthly fees. Buy your home with as little as a 5% deposit. You can redraw your repayments if you’re ahead. Choose to repay weekly, fortnightly, or monthly. Make extra payments without penalty, to pay off your home loan even faster.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • OMG Home Loan

    • Owner Occupier
    • Principal & Interest
    • <60% LVR
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.03 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Enjoy no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and eligibility criteria apply.

  • Budget Home Loan

    • LVR <80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.07 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Enjoy a discounted variable home loan from IMB. Get up to $4,000 cashback (T&Cs apply). Life-of-loan discount off IMB’s standard variable interest rate. Unrestricted additional repayments. Free Internet and Mobile Banking redraws (T&Cs apply). No monthly fees to pay. Up to a 30 year loan term. Split loan available. No offset account.

  • Variable Home Loan 90

    • Principal and Interest
    • LVR <90%
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.08 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

  • Basic Variable Home Loan

    • Owner Occupier
    • LVR <60%
    Interest rate
    6.13 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,040
    Go to site

    Competitive interest rate. No ongoing monthly loan maintenance fees. Buy your home with as little as a 5% deposit. You can redraw your repayments if you’re ahead. Choose to repay weekly, fortnightly, or monthly. Make extra payments without penalty, to pay off your home loan even faster.

  • Basic Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.

  • Offset Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    100% offset account so you can save on interest and reduce the amount you pay on your home loan. Free redraw. 100% offset account. Only 5% deposit required. No ongoing monthly loan maintenance fees to pay. Tiered interest rates so you can benefit from a lower rate when you borrow less.

  • Offset Home Loan

    • Owner Occupier
    • LVR<60%
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.39 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

  • Offset Variable Home Loan

    • Principal & Interest
    • LVR <60%
    Interest rate
    6.34 % p.a.
    Variable
    Comparison rate
    6.37 % p.a.
    Initial monthly repayment
    $3,108
    Go to site

    Competitive interest rate. 100% offset account so your savings can reduce the amount of interest you pay on your home loan. No ongoing monthly fees. Buy your home with as little as a 5% deposit. You can redraw your repayments if you’re ahead. Choose to repay weekly, fortnightly, or monthly. Make extra payments without penalty, to pay off your home loan even faster.

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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.

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