October home loan snapshot: Lenders no longer waiting for the RBA

Collage of October florals with a black and white house

Home buyers and lenders are no longer waiting for the RBA to make moves. Indeed, there were no moves made: the Reserve Bank of Australia has left the official cash rate at 4.10% for October, marking the fifth month in a row of constant interest rates since June 2023. 

Home values have bounced as the tide turns for spring property – a remarkable recovery in demand. Despite a lack of official rate hikes, many lenders have chosen to raise variable and fixed interest rates on their home loans, but plenty more have started to cut rates, too. 

Inflation is at a volatile moment, so the RBA will watch carefully as we close out the year. If holiday shopping demand proves too much, we may get another kick with a 0.25% hike in November or December.

However, the longer the RBA holds, the more experts speculate the next major rate change will be a rate cut, potentially sending shockwaves to home loans late next year.

Fixed rates have begun ticking down ever so lightly as the hold prolongs, but beware of fixing your mortgage just yet: if you fix now, you potentially fix through the first series of rate cuts predicted to hit the market by September 2024 (at the earliest). If we hit a recession, rates could come down much sooner. 

Despite the many rate changes made by lenders, the average for owner-occupiers making P&I repayments has more or less stayed the same for the last four months, hovering between 6.60% and 6.61% p.a. The market as a whole hasn’t turned yet, but it’s still worth looking at individual offers a bit more closely. You never know where you might find value that works for you. 

Head to our RBA rate tracker for more information on how RBA decisions affect home loans. 

Fixed rates could be at the tipping point

Home buyers buying a house with a fixed interest rate home loan

Sensing the interest rate environment could lower soon, lenders have begun shaving basis points off their fixed home loans. Many fixed offers in Mozo’s database are now comparable rate-wise to variable home loans, but don’t get too excited too soon: they likely have further to drop. 

It is promising, though. For a long time, fixed home loans have more or less been out of the market in terms of competitiveness. If the RBA hold remains steady, then fixed mortgages may truly be at the tipping point for good value

At the time of writing, these are the average fixed rates for owner occupiers with an 80% LVR and a $400,000 loan:

  • 1-year: 6.37% p.a. 
  • 2-year: 6.31% p.a. 
  • 3-year: 6.24% p.a. 
  • 4-year: 6.47% p.a. 
  • 5-year: 6.47% p.a.

Recent home loan rate movements

Home buyers comparing variable interest rate home loan movements with their lender

Home loans had a mixed bag of changes last month, with many rate adjustments depending on the mortgage and borrower type. Some of the most significant cuts came from Big Four Banks like ANZ and NAB – since they own most of the market, any trends from them inevitably become trendsetters. Watch this space. 

Here are some of the highlights from September. 

  • AMP Bank and Bank of Sydney lifted many of their rates between 5 and 50 basis points. 
  • Bendigo Bank wound down its Complete Home Loan rates by 15 bp. 
  • NAB slashed a whopping 96 bp off its Base Variable Rate Home Loan for P&I borrowers. Westpac, on the other hand, increased its Flexi First Option rates by 10 bp. 
  • ANZ lowered many of its fixed year terms for owner-occupiers, including 1-year fixed rates by 10 bp and its 2- and 3-year rates by 30 bp.
  • HSBC hiked most of its fixed offers between 4 and 70 bp – a few of its variable options are up 5 bp, as well. 

We’ve also farewelled many exciting extras such as cashback for refinancers. Bank of Queensland slashed its cashback offer from $3,000 to $2,000 while Credit Union SA ended its $5,000 bonus completely for first home buyers. 

IMB Bank, however, stood out from the crowd by increasing its refinancer cashback offer from $2,000 to $2,500.

Current lowest home loan rates

Woman compares the lowest home loan interest rates in the Mozo database

Here are the lowest variable and fixed mortgage rates (P&I, LVR <80%) among lenders we track.

Lowest variable rates — Mozo database (3 October 2023)^^

Variable rate
Pacific Mortgage Group
Standard Variable Home Loan
5.54% p.a. (5.54% p.a. comparison rate*)
Firefighters Mutual Bank
Your Way Basic Variable Home Loan
5.64% p.a. (5.70% p.a. comparison rate*)
Health Professionals Bank
Your Way Basic Variable Home Loan
5.64% p.a. (5.70% p.a. comparison rate*)
Teachers Mutual Bank
Your Way Basic Variable Home Loan
5.64% p.a. (5.70% p.a. comparison rate*)

Lowest and average fixed rates — Mozo database (3 October 2023)^^

Rate leader
Fixed rate
Macquarie Credit Union
5.48% p.a. (7.89% p.a. comparison rate*)
South West Slopes Credit Union
5.49% p.a. (6.18% p.a. comparison rate*)
Australian Mutual Bank
5.48% p.a. (6.10% p.a. comparison rate*)
Qudos Bank
5.84% p.a. (5.94% p.a. comparison rate*)
5.54% p.a. (6.20% p.a. comparison rate*)

The above are the lowest rates in our database for borrowers with an LVR < 80%. More competitive rates are available for borrowers with lower loan-to-value ratios.

If you’re considering buying property or refinancing your existing mortgage, use Mozo’s home loan comparison table to examine lenders side-by-side, or use our refinance calculator to see how much you could save.

^^Interest rates are based on an owner occupier making principal and interest repayments on a $400,000 loan with an 80% LVR. Check out our dedicated Australian home loan statistics page for more information on average mortgage rates.

Compare home loans - last updated 8 December 2023

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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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