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 rateLenderLoan
2.17% (2.20% comparison rate*)Well Home LoansWell Balanced
2.19% (2.20% comparison rate*)Tic:TocVariable Home Loan
2.19% (2.22% comparison rate*)Reduce Home LoansSuper Saver Variable
2.19% (2.59% comparison rate*)firstmacBasic 80 (Broker Special)
2.25% (2.25% comparison rate*)Pacific Mortgage GroupStandard 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:

TermRate LeaderFixed rateAverage
1-yearReduce Home Loans1.90% (2.43% comparison rate*)2.51%
2-yearIllawarra Credit Union1.99% (2.93% comparison rate*)2.48%
3-yearBank First1.99% (3.10% comparison rate*)2.52%
4-yearBankVic2.49% (2.88% comparison rate*)2.90%
5-yearCiti2.39% (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 24 April 2024

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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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