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 - last updated 8 December 2023

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
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    interest rate
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    Initial monthly repayment
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  • Offset Home Loan

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    Initial monthly repayment
    6.24% p.a. variable
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    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.

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    LVR<80%, Owner Occupier, Principal & Interest

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    Initial monthly repayment
    6.14% p.a. variable
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  • Basic Home Loan

    Owner Occupier, LVR<70%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.24% p.a. variable
    6.26% p.a.

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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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