October home loan snapshot: ING and CBA cut rates, lenders launch LMI waivers
Spring has sprung which means the property market has started to heat up, but so too has the home loan market, with lenders making a series of cuts in recent weeks and more likely to come in the month ahead.
So what is the current state of home loan rates in October and what are the rising trends we’ve been witnessing in the market?
Variable rates: ING and CBA trim offers
According to the latest edition of the Mozo Banking Roundup, the steady flow of variable rate cuts has continued over the past month, meaning the average variable home loan rate in the Mozo database has reduced from 3.36% to 3.33%.
ING was perhaps the most notable lender to sharpen rates for owner occupiers in recent weeks, taking 10 basis points off two of its popular offers.
The changes leave the lowest rates available on ING’s Mortgage Simplifier at 2.45% (2.48% comparison rate*) and 2.50% (2.85% comparison rate*) on its Orange Advantage (Package) loan. Among the other notable changes:
- The Commonwealth Bank cut its Extra Home Loan rate to 2.69% (2.70% comparison rate*) - the lowest available among the big four
- People’s Choice Credit Union dropped the rate on its Basic Variable Home Loan to 2.49% (2.49% comparison rate*)
- Online lender Athena cut rates on its AcceleRATES Variable Home Loan to as low as 2.34% (2.34% comparison rate*) for borrowers with lower loan-to-value ratios
To put these all these recent changes into perspective, here are the five lowest basic variable home loan rates^ in the Mozo database as of October 1, 2020:
Variable rate | Lender | Loan |
2.17% (2.20% comparison rate*) | Well Home Loans | Well Balanced |
2.19% (2.19% comparison rate*) | Reduce Home Loans | Super Saver Variable |
2.19% (2.59% comparison rate*) | firstmac | Basic 80 (Broker Special) |
2.29% (2.32% comparison rate*) | Homestar | Star Essentials Home Loan |
2.34% (2.34% comparison rate*) | Pacific Mortgage Group | Standard Variable Loan |
Fixed rates: Short term cuts continue
In more good news for borrowers fixed rate cuts certainly haven't let up, as the Mozo Banking Roundup reported on a number of changes which have occurred in recent weeks. As a result, fixed home loan interest rate averages have fallen across the board.
Lenders appear to be continuing to target shorter term fixed loans, with the most notable changes in recent weeks all being made to 2-year and 3-year fixed home loan rates:
- AMP reduced the 2-year rate on its Fixed Rate Loan (Professional Package) to 2.19% (3.13% comparison rate*)
- Online lender Tic:Toc cut its 2-year Fixed Home Loan rate to 2.09% (2.35% comparison rate*)
- Illawarra Credit Union introduced a new 2-year fixed rate of just 1.99% (2.93% comparison rate*) with on its The Works Fixed Home Loan Special Offer (Package)
- Homestar launched a new 3-year fixed rate of just 2.06% (2.38% comparison rate*) on its Star Classic Fixed Home Loan
Here’s how these changes stack up against the lowest fixed rates in the Mozo database (as well as our fixed home loan averages) as of October 1, 2020:
Term | Rate leader | Fixed rate | Average |
1-year | Reduce Home Loans | 1.90% (2.43% comparison rate*) | 2.55% |
2-year | Community First Credit Union | 1.99% (3.25% comparison rate*) | 2.50% |
3-year | Bank First | 1.99% (3.11% comparison rate*) | 2.57% |
4-year | HSBC | 2.50% (2.95% comparison rate*) | 2.91% |
5-year | Virgin Money | 2.49% (2.87% comparison rate*) | 2.94% |
Lenders Mortgage Insurance reductions
Aside from changes to interest rates, another trend which has popped up in recent weeks - and one that might see more of given the competitiveness of the market - is the waiving or reduction of Lenders Mortgage Insurance (LMI) from some lenders.
Lenders generally require borrowers to take out LMI on loans with a loan-to-value ratio (LVR) above 80%, meaning it’s particularly common among first-time buyers.
However, in recent weeks a number of lenders including ME Bank, St. George and Virgin Money have either come out with offers to reduce the cost of LMI, or waive the cost altogether for borrowers applying for particular loans.
Depending on the size of the loan and the loan-to-value ratio involved, these LMI reductions could potentially end up saving borrowers thousands of dollars.
RELATED: ME Bank and Virgin Money slash Lenders Mortgage Insurance
Looking to enter the property market this spring, or refinance your existing loan? Cast your eyes over the hot rates in the table below, or head on over to the Mozo home loan comparison tables for the latest rates from even more 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 19 April 2024
-
Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Owner Occupier, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable5.90% p.a.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.
CompareCompareUnloan Variable
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.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% 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
- $10,000
- maximum borrowing amount
- $10,000,000
- 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 Unloan Unloan Variable
-
Mozo experts choice awards won:
- Exceptional Value Home Lender - 2024
Express Home Loan
Owner Occupier, Principal & Interest, LVR <90%
interest rate
comparison rate
Initial monthly repayment6.01% p.a. variable6.14% p.a.Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.
CompareCompareExpress Home Loan
Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- Upfront fees
- $134
- Ongoing fees
- $10.00 monthly
- Discharge Fee
- $350.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $5,000
- maximum borrowing amount
- $3,000,000
- 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 Bendigo Bank Express Home Loan
-
Flex Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment5.99% p.a.
fixed 3 years6.37% 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.
CompareCompareFlex Home Loan
Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.
- interest rate
- 5.99% p.a.
fixed 3 years
- comparison rate
- 6.37% p.a.
- interest rate
- 5.99% p.a.
fixed 3 years
- comparison rate
- 6.37% p.a.
- Upfront fees
- $250
- Ongoing fees
- $250.00 yearly
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- -
- 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 ubank Flex Home Loan
-
Discounted Home Value Loan
Owner Occupier, Principal & Interest, LVR 70-80%
interest rate
comparison rate
Initial monthly repayment6.09% p.a. variable6.09% p.a.Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).
CompareCompareDiscounted Home Value Loan
Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).
- interest rate
- 6.09% p.a. variable
- comparison rate
- 6.09% p.a.
- interest rate
- 6.09% p.a. variable
- comparison rate
- 6.09% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $15,000,000
- 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 HSBC Discounted Home Value Loan
-
Neat Home Loan
Owner Occupier, Principal & Interest, LVR <60%
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.16% p.a.Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.
CompareCompareNeat Home Loan
Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- Upfront fees
- $250
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $80,000
- maximum borrowing amount
- $5,000,000
- 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 ubank Neat Home Loan
Your selected home loans
Your selected home loans
Your selected home loans
Your selected home loans
Your selected home loans
* 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.
^See information about the Mozo Experts Choice Home Loan Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.