Online lenders hit home loans with massive 0.30% - 0.50% rate hikes

The Reserve Bank of Australia surprised the market in May with another 0.25% rate hike, but the market astonishes even more. In the last two days, many online lenders funded by Bendigo and Adelaide Bank have made sweeping changes to their variable offers for new customers, most at or over 0.30% p.a.
Smaller lenders running ahead of the RBA

While it’s not uncommon for lenders to pass along the full RBA rate hike, it is uncommon for them to exceed it, especially from small online mortgage lenders who often rely on sharp rates to remain competitive with the bigger banks.
Here’s a summary of affected variable home loan offers. Existing customers may have different changes applied to their mortgages.
Massive loan hikes from Adelaide Bank group lenders (OO, P&I, 19 May 2023)
Lender | Home loan | Increase | New rate |
Adelaide Bank | SmartFit, LVR > 90% | 0.30% | 7.08% p.a. (7.28% p.a. comparison rate*) |
Mortgage House | Advantage Standard Home Loan, LVR < 95% | 0.50% | 6.89% p.a. (7.00% p.a. comparison rate*) |
Reduce Home Loans | Rate Slasher Variable Home Loan, LVR < 90% | 0.30% | 6.39% p.a. (6.47% p.a. comparison rate*) |
Tic:Toc | Variable Home Loan | 0.35% | 5.39% p.a. (5.40% p.a. comparison rate*) |
Yard | Variable Home Loan, LVR 80-90% | 0.30% | 6.49% p.a. (6.53% p.a. comparison rate*) |
Qantas Money | Variable Home Loan, LVR < 90% | 0.30% | 5.54% p.a. (5.60% p.a. comparison rate*) |
Variable interest rates are sensitive to cash rate changes, lifting to absorb the rise in a lender’s funding costs while keeping in line with the market. But would a lender push rates well ahead of the RBA’s target?
In short: money. In long: how a bank wants to hold onto their money. With inflation still running amok and uncertainty surrounding the RBA’s future moves, these changes might be anticipatory, not just reactionary. Almost no one expected the RBA to move in May, and experts remain divided over whether we’ll see another rate hike this winter. These small lenders may be jumping ahead of the RBA’s next decision.
It could also be these lenders have copped pricier funding costs because they’re smaller subsidiaries of Bendigo and Adelaide Bank. Normally these small lenders sell at retail what the big bank sells wholesale, but inflation may finally have caught up with them.
Much of their additional pandemic-era funding (through the RBA’s Term Funding Facility) will draw to a close this September, as well. The banks may be hiking while they can before they lose their support.
It’s also important to note that existing customers may only face a 0.25% rise in line with the RBA, not the steep rates advertised to new customers. Tic:Toc and Qantas Money’s offers in the table are still below the average variable interest rate in Mozo’s database, 6.28% p.a.
With everything in flux, it’s a well-timed reminder for customers to make sure their mortgage rate remains competitive.
Compare low-interest rates in the table below.
Compare low interest rate home loans - last updated 3 December 2023
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2023
Unloan Variable
Owner Occupier, Refinance Only, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.74% p.a. variable5.65% p.a.For refinancers only. 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 in as little as 10 minutes.
CompareCompareUnloan Variable
For refinancers only. 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 in as little as 10 minutes.
- interest rate
- 5.74% p.a. variable
- comparison rate
- 5.65% p.a.
- interest rate
- 5.74% p.a. variable
- comparison rate
- 5.65% 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
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Mozo experts choice awards won:
- Packaged Home Loan - 2023
Variable Rate Home Loan Special Offer
Package, Owner Occupier, Principal & Interest, LVR<80%
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.51% p.a.Package benefits across Home Loans, Visa Credit Card, Personal Loans and Term Deposits. No package fee for the first year. No application, settlement or redraw fees to pay. Quick and easy application. Free CoreLogic RP Data property reports. *Terms, conditions and lending criteria apply.
CompareCompareVariable Rate Home Loan Special Offer
Package benefits across Home Loans, Visa Credit Card, Personal Loans and Term Deposits. No package fee for the first year. No application, settlement or redraw fees to pay. Quick and easy application. Free CoreLogic RP Data property reports. *Terms, conditions and lending criteria apply.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.51% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.51% p.a.
- Upfront fees
- $0
- Ongoing fees
- $395.00 yearly
- Discharge Fee
- $350.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- -
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- $0 package fee for the first year.
Read our Mozo Review to learn more about the Credit Union SA Variable Rate Home Loan Special Offer
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Offset Home Loan
Package, Owner Occupier, LVR<60%, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.39% p.a.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.
CompareCompareOffset Home Loan
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.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.39% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.39% p.a.
- Upfront fees
- $350
- Ongoing fees
- $248.00 yearly
- Discharge Fee
- $400.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Macquarie Offset Home Loan
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Flex Home Loan
Owner Occupier, Principal & Interest, LVR <80%
interest rate
comparison rate
Initial monthly repayment6.19% p.a. variable6.43% p.a.Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process.
CompareCompareFlex Home Loan
Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process.
- interest rate
- 6.19% p.a. variable
- comparison rate
- 6.43% p.a.
- interest rate
- 6.19% p.a. variable
- comparison rate
- 6.43% 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
- 80.00%
- minimum borrowing amount
- -
- 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 ubank Flex Home Loan
-
Well Balanced Special Offer
Owner Occupier, Principal & Interest, LVR <80%
interest rate
comparison rate
Initial monthly repayment6.12% p.a. variable6.14% p.a.Competitive low rates available for owner occupiers. Free online redraws. 100% offset account for a small fee ($10 p/mth). Quick and easy application online. Get a free evaluation (Valued up to $300). Minimum loan amount $100K.
CompareCompareWell Balanced Special Offer
Competitive low rates available for owner occupiers. Free online redraws. 100% offset account for a small fee ($10 p/mth). Quick and easy application online. Get a free evaluation (Valued up to $300). Minimum loan amount $100K.
- interest rate
- 6.12% p.a. variable
- comparison rate
- 6.14% p.a.
- interest rate
- 6.12% p.a. variable
- comparison rate
- 6.14% p.a.
- Upfront fees
- $785
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- Optional - $10 per month
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $200,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
* 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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