November home loan snapshot: Further rate cuts are on the horizon
For the first time since March all eyes and ears will be seriously tuned in to the Reserve Bank’s monetary policy decision tomorrow, as the possibility of a reduction to the official cash rate looms large.
In terms of home loan interest rates, an RBA cut would set the tone for November and the months beyond, with lenders likely to respond to any cut by pushing their own rates even lower.
“It’s really difficult to predict what the banks will do, but there’s a decent chance that they will pass on a rate reduction to variable rate customers,” said Mozo Banking Expert, Peter Marshall.
"However, I think the picture is going to be a bit complicated in that the Reserve Bank is likely to do things to put pressure on fixed rates as well. So the banks may decide that if they’re cutting fixed rates, they will leave variable cuts for another time.”
That’s not to say that rate drops have come to a standstill. Home loan rates, as well as rates on other banking products such as savings accounts, term deposits and personal loans, have all been falling steadily for months.
In fact, according to the most recent Mozo Banking Roundup, there have been a number of significant changes to both variable and fixed home loan rates in the past few weeks.
Variable rates: Online lenders maintain supremacy
Despite a number of significant cuts in recent weeks, the average variable home loan rate for owner occupiers in the Mozo database actually ticked up fractionally month-on-month from 3.33% on October 1 to 3.34% today. Here are some of the standout movements for both owner occupiers and investors:
- Tic:Toc dropped its Variable Home Loan rate by 20 basis points to just 2.19% (2.20% comparison rate*) - one of the lowest in our database.
- Neobank 86 400 took 10 basis points off its Own Home Loan meaning the rate now sits at 2.64% (2.92% comparison rate*).
- Bank of Melbourne, BankSA and St.George, who are all members of the Westpac group, cut their respective Basic Home Loan Special Offers by 10 basis points to 2.54% (2.65% comparison rate*).
- ING reduced its Mortgage Simplifier rate for investors by a considerable 50 basis points, meaning it now rates among the lowest comparable offers in our database at 2.69% (2.72% comparison rate*).
Interested in how your own variable rate compares? Here’s a snapshot of the five lowest variable home loan rates^ in our database as of November 2, 2020:
Variable rate | Lender | Loan |
2.17% (2.20% comparison rate*) | Well Home Loans | Well Balanced |
2.19% (2.20% comparison rate*) | Tic:Toc | Variable Home Loan |
2.19% (2.22% comparison rate*) | Reduce Home Loans | Super Saver Variable |
2.19% (2.59% comparison rate*) | firstmac | Basic 80 (Broker Special) |
2.25% (2.25% comparison rate*) | Pacific Mortgage Group | Standard Variable Home Loan |
Fixed rates: Citi sets new benchmark
Fixed rate home loans have also been in flux in recent weeks, though unlike variable rates, our averages have only dropped lower. You can see the specific figures in the table below.
In terms of individual cuts by lenders, there have been a couple of standout changes, including a few seriously low offers:
- Citi has taken out the rate-leading position in our database after cutting the 5-year rate on its Fixed Rate Loan by 20 basis points to 2.39% (4.14% comparison rate*).
- Sydney Mutual Bank and Endeavour Mutual Bank, which are both brands under the Australian Mutual Bank umbrella, launched new 2-year fixed rates of 1.99% (2.81% comparison rate*) for first home buyers.
- Qudos Bank took 10 basis points off a number of terms on its Fixed Rate Home Loan for both owner occupiers and investors.
- P&N Bank reduced the 1-year rate on its Fixed Rate Home Loan offer by a whopping 101 basis points to 1.99% (3.70% comparison rate*).
Check out the following table to see how these offers compare to the lowest fixed rates^ and average fixed rates in the Mozo database as of November 2, 2020:
Term | Rate Leader | Fixed rate | Average |
1-year | Reduce Home Loans | 1.90% (2.43% comparison rate*) | 2.51% |
2-year | Illawarra Credit Union | 1.99% (2.93% comparison rate*) | 2.48% |
3-year | Bank First | 1.99% (3.10% comparison rate*) | 2.52% |
4-year | BankVic | 2.49% (2.88% comparison rate*) | 2.90% |
5-year | Citi | 2.39% (2.97% comparison rate*) | 2.91% |
Of course, mortgage rates may change dramatically in the coming days and weeks if the RBA does decide to cut rates. So to stay up to date, keep an eye on our respective Reserve Bank and home loan news hubs for all the latest decisions from banks and lenders.
^Based on an owner occupier making principal and interest repayments on a $400,000 loan with an 80% LVR.
Compare home loans - last updated January 24, 2021
Smart Booster Home Loan
1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR
interest rate
comparison rate
Initial monthly repayment
1.99% p.a.variable for 12 months and then 2.48% p.a. variable2.47% p.a.CompareCompareSmart Booster Home Loan
A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required.
- interest rate
- 1.99% p.a.variable for 12 months and then 2.48% p.a. variable
- comparison rate
- 2.47% p.a.
- Upfront fees
- $520
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- Optional - with 0.10% additional interest
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $1,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Smart Booster Home Loan
UHomeLoan - Discount Offer
Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
2.34% p.a. variable2.34% p.a.CompareCompareUHomeLoan - Discount Offer
Enjoy a super low rate, $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Free redraw with flexible repayments. Min 20% deposit.
- interest rate
- 2.34% p.a. variable
- comparison rate
- 2.34% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- -
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the UHomeLoan - Discount Offer
Celebrate Variable Home Loan
<60% LVR, Owner Occupier, Principal & Interest
interest rate
comparison rate
Initial monthly repayment
2.19% p.a. variable2.19% p.a.CompareCompareCelebrate Variable Home Loan
Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^
- interest rate
- 2.19% p.a. variable
- comparison rate
- 2.19% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $100,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Celebrate Variable Home Loan
Basic Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR 70-80%
interest rate
comparison rate
Initial monthly repayment
2.09% p.a.
fixed 2 years2.56% p.a.CompareCompareBasic Home Loan
Flexible loan structure – create up to six loan accounts with different rate and repayment types. Free redraw from your loan using Macquarie Online.
- interest rate
- 2.09% p.a.
fixed 2 years
- comparison rate
- 2.56% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $400.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $750,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Basic Home Loan
Fixed Home Loan Special Offer
Owner Occupier, Principal & Interest, <80% LVR
interest rate
comparison rate
Initial monthly repayment
1.89% p.a.
fixed 2 years2.94% p.a.CompareCompareFixed Home Loan Special Offer
Competitive low rates starting from 1.89% (2.94% comparison rate) 2 years fixed for owner occupiers. No monthly account keeping fees & No loan establishment fee.
- interest rate
- 1.89% p.a.
fixed 2 years
- comparison rate
- 2.94% p.a.
- Upfront fees
- $0
- Ongoing fees
- $375.00 yearly
- Discharge Fee
- $350.00
- Extra repayments
- yes - free up to $500 per month
- Redraw facility
- no
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- -
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Fixed Home Loan Special Offer
^See information about the Mozo Experts Choice Home Loans Awards
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