October home loan snapshot: ING and CBA cut rates, lenders launch LMI waivers

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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 rateLenderLoan
2.17% (2.20% comparison rate*)Well Home LoansWell Balanced
2.19% (2.19% comparison rate*)Reduce Home LoansSuper Saver Variable
2.19% (2.59% comparison rate*)firstmacBasic 80 (Broker Special)
2.29% (2.32% comparison rate*)HomestarStar Essentials Home Loan
2.34% (2.34% comparison rate*)Pacific Mortgage GroupStandard 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:

TermRate leaderFixed rateAverage
1-yearReduce Home Loans1.90% (2.43% comparison rate*)2.55%
2-yearCommunity First Credit Union1.99% (3.25% comparison rate*)2.50%
3-yearBank First1.99% (3.11% comparison rate*)2.57%
4-yearHSBC2.50% (2.95% comparison rate*)2.91%
5-yearVirgin Money2.49% (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.

Home loan comparisons on Mozo

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can search our database of 473 home loans.
Last updated 22 June 2024 Important disclosures and comparison rate warning*
  • 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.

  • 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.

  • 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.

  • 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.

  • Discount Variable Home Loan

    • Owner Occupier
    • LVR<70%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.01 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

  • Variable Home Loan 90

    • Principal and Interest
    • LVR <90%
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.06 % 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.

  • Fixed Rate Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Fixed 3 years
    Comparison rate
    6.15 % p.a.
    Initial monthly repayment
    $3,027

    Additional repayments of up to $10K per fixed year. Interest rate discounts available. Waiver of $499 application fee when combined with an Orange Advantage Home Loan.

  • The Better Home Loan Special Offer

    • Owner Occupier
    • Principal & Interest
    • LVR<80%
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Enjoy a variable rate home loan with a bunch of features from Police Credit Union. Make extra repayments at any time without penalty. No monthly, annual or upfront fees. Free online redraw. Minimum 20% deposit. Qualifying criteria applies. Minimum loan amount is 200K. For new customers only. Mozo Experts Choice Home Lender Credit Union of the Year 2023.

  • 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.

  • Mortgage Simplifier

    • LVR<80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • 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.

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR<70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.20 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.42 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.59 % p.a.
    Fixed 3 years
    Comparison rate
    7.06 % p.a.
    Initial monthly repayment
    $3,190

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

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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.

^See information about the Mozo Experts Choice Home Loan Awards

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