Property prices jump, mortgage rates drop: what it means for Aussie borrowers

Australia’s property market appears to be bouncing back as median property values have gone up across most capital cities. Plus, home loan lenders have continued to slash rates - so what does this mean for Aussie borrowers? 

CoreLogic’s latest Hedonic Home Value Index which showed that housing values jumped up by 1.1% nationally from last month. 

CoreLogic’s Head of Research Tim Lawless says that based on the current run rate growth, he predicts that prices will hike up even more and believes the national index will probably hit another high over the next two months. 

“Structural factors may also be at play, including a rise in borrowing capacity following changes to serviceability assessment from APRA in July 2019, and the dominance of owner occupier buyers (rather than investors) through the recovery phase to date.” 

“With lenders favouring ‘high quality’ borrowers, buyers with a large deposit and low level of debt relative to their incomes, are likely to be those who receive the lowest mortgage rates - another factor that could be supporting demand at the more expensive end of the market.”

Sydney and Melbourne’s property markets saw the biggest jump not only month on month but year on year as well - with Sydney hiking up by 10.9% from last year and Melbourne by 10.7%. And notably, Sydney’s house median value has crept above $1 million again, sitting at $1,001,357. 

Rundown of the current Australian Capital City property market 

City Month ChangeYear ChangeTotal Dwellings Median Value House Median ValueUnit Median Value
Sydney+1.7%+10.9%$872,934$1,001,357$763,962
Melbourne+1.2%+10.7%$689,088$809,719$583,294
Brisbane+0.6%+1.9%$503,265$551,766$384,396
Adelaide+0.1%+0.4%$439,453$477,129$325,243
Perth+0.3%-4.0%$442,691$458,582$357,593
Hobart+0.8%+5.0%$488,968$520,201$398, 394
Darwin-1.4%-7.8%$386,345$469,526$271,847
Canberra+0.8%+4.1%$631,862$704,865$445,354

Why could now be a good time to take out a home loan? 

With house prices only expected to rise and mortgage rates at an all time low, for Aussies looking to take out a home loan - if you were already thinking about jumping into the property market now may be a good time to do it. 

While the Reserve Bank of Australia (RBA) didn’t cut its official cash rate in February experts are predicting they will cut tomorrow, thus 13 mortgage lenders in Mozo’s database made cuts to existing loans or introduced new competitive home loan products in the last month. 

Currently, the average variable rate amongst lenders is 3.67%, compared to 4.34% this time last year. Plus, with a potential RBA cut coming either this month or in the next few months, rates could drop even lower across more lenders.

RELATED ARTICLE: Australia’s cheapest home loans unveiled 

If you are itching to get your hands on a property and can’t wait to lock in a killer home loan, check out some mortgage options below or jump over to our home loan comparison tool. 

Home Loans 2020 - rates updated daily

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
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    Mozo Experts Choice 2021
    Smart Booster Home Loan

    1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

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    Initial monthly repayment
    1.99% p.a.variable for 12 months and then 2.48% p.a. variable
    2.47% p.a.

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.

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    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
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    Initial monthly repayment
    1.75% p.a.
    fixed 3 years
    2.22% p.a.

    $0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

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  • placeholder
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
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    Initial monthly repayment
    2.09% p.a.
    fixed 3 years
    2.43% p.a.

    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

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    Mozo Experts Choice 2021
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.19% p.a. variable
    2.19% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.

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    Fixed Home Loan

    Owner Occupier, Principal & Interest

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    Initial monthly repayment
    1.89% p.a.
    fixed 2 years
    2.15% p.a.

    Award-winning low rate home loan that could save you thousands. No application or ongoing fees, fee-free redraws, unlimited additional repayments and an optional offset account for $10/month. Minimum 10% deposit. Winner of Mozo’s Experts Choice Award for Online Home Lender of the Year 2021.^

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    Mozo Experts Choice 2021
    Well Balanced

    Owner Occupier, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    2.17% p.a. variable
    2.20% p.a.

    Well Balanced home loan is a low rate home loan with free online redraw and no valuation fee. Purchase, Refinance or Equity Release purposes allowed. Offset Home Loan winner in the Mozo Expert's Choice Award for 2021.

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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, loan amount and term entered. 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 Loans Awards

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