September home loan snapshot: A softer market doesn’t always mean a cheaper market

cheerful woman holds key in front of her house

Last month, the Reserve Bank of Australia (RBA) increased the official cash rate again and economists predict that we’ll continue to see more hikes until early 2023.

The current cash rate is 1.85%, and several banks have applied the increase to their variable loans. As a result, Australia’s property market has gradually cooled down, meaning that properties aren’t selling as quickly as they did in 2021. To top that off, CoreLogic reported a 2.0% price drop in capital cities last month. The last time it dropped this rapidly was more than 40 years ago.

Sadly, most price drops have come at the market’s expensive end, meaning that most properties might still be advertised at a “full” price. 

With rising interest rates and expense price tags, home buyers–especially first time buyers–are less likely to get a home loan. CoreLogic data says home loan lending has decreased by 4.4%, and first home buyer lending went down by 10.0% in June.

It's important to remember that we are also seeing a drop in auction activity and this can work in a buyer’s favour. More specifically, buyer competition has reduced, which could be good for price negotiations.

So how are variable rates and fixed rates looking in this current market? Find out below.

Fixed home loans now average above a ‘4’

Ultra low fixed rates are a thing of the past. Once upon a time, several fixed rates started with a ‘1’, but now the lowest fixed rates in our database are a handful of rates starting with a ‘3’.

According to Mozo’s database, the average fixed rates for owner occupiers with an 80% LVR and a $400,000 loan are:

  • 1-year - 4.98% p.a.
  • 2-year - 5.49% p.a.
  • 3-year - 5.78% p.a.
  • 4-year - 6.01% p.a.
  • 5-year - 6.25% p.a.

The graph below shows that fixed rates skyrocketed at the start of 2022. Several economists predict that this trend will continue well into next year.

Recent fixed and variable interest rate movements

We’ve seen increases across all the home loan products in our database. In fact, in the last month, there were 1770 increases in variable home loan products and 909 in fixed home loan products tracked in the Mozo database. Many of the variable home loan interest rate hikes were in line with the RBA’s new cash rate.

Here are some notable changes from the last month.

Variable home loans

  • Nano increased rates by 65bp, now from 3.89% p.a. (3.89% p.a. comparison rate*). 
  • Bank Australia lifted the rates on its Basic Home Loan by 25 to 39bp, now starting from 3.55% p.a. (3.59% p.a. comparison rate*). 
  • Bank First’s Complete Home Loan rates are only up 13bp. Rates start from 3.59% p.a. (3.64% p.a. comparison rate*).

Fixed rate home loans

Surprisingly we saw some fixed rate cuts this month.

  • Commbank cut its 4 year fixed rate by 160bp to 4.99% p.a. (5.77% p.a. comparison rate*).
  • Westpac also cut its 4 year fixed rate by 100bp to 4.99% p.a. (5.40% p.a. comparison rate*).
  • Macquarie cut all its fixed term rates by 75bps.

Lowest home loan rates

Even though the interest rate averages for home loans have gone up, there are still a few variable and fixed rates below a ‘3’ in the Mozo database. Below are the lowest variable and fixed mortgage rates (P&I, LVR <80%) among lenders we track.

Lowest variable rates — Mozo database (September 1, 2022)^^

LenderLoanVariable rate
Gateway BankGreen Plus Home Loan (Premium Package)3.19% p.a. (3.51% p.a. comparison rate*)
Easy StreetStreet Smart Variable Home Loan (Owner Occupier, Principal & Interest)3.24% p.a. (3.28% p.a. comparison rate*)

Lowest and average fixed rates — Mozo database (September 1, 2022)^^

TermRate leaderFixed rate
1-yearThe Capricornian 3.55% p.a. (5.17% p.a. comparison rate*)
2-yearQueensland Country Bank 3.99% p.a. (4.87% p.a. comparison rate*)
3-yearQueensland Country Bank 3.99% p.a. (4.80% p.a. comparison rate*)
4-yearP&N Bank 4.99% p.a. (4.33% p.a. comparison rate*)
5-yearBank of Queensland 4.99% p.a. (4.97% p.a. comparison rate*)

These are the lowest rates available in our database for borrowers with an <80% LVR. More competitive rates are available for borrowers with LVRs below 70% and 60%.

Are you thinking about a property or looking to refinance your existing mortgage? Use Mozo’s handy 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.

Loan details

Rate change

Repayment change if rates go up

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 472 home loans.
Last updated 14 June 2024 Important disclosures and comparison rate warning*
  • 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.

  • 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.

  • 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.

  • 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.

image of houses

Need help with refinancing?

You might have questions that need personal answers. We’ve teamed up with the mortgage brokers at Lendi to get you the answers you need, and a home loan deal you deserve.

Learn more

* 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.