September home loan snapshot: Refinancers targeted with extensive rate discounts

By Tom Watson · · 3 min read
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Competition for borrowers continues to remain fierce heading into spring, with lenders cutting their sharpest variable and fixed mortgage rates by even greater margins and offering up more incentives for refinancers to switch loans.

Those are the top line takeaways from the latest edition of the Mozo Banking Roundup which has wrapped up the key changes to rates and features on a number of banking products including home loans. 

So, what is the state of home loan rates in September and which lenders have made the most significant changes of late? Read on.

Fixed rates: Virgin Money launches market leading 5-year offer

Fixed rate cuts haven’t let up in the past month, with the latest figures from the Mozo database revealing that average fixed rates have fallen across the board - the 2-year fixed average being the lowest of these at 2.52% as of September 1.

Perhaps the most noteworthy cut of late came from Virgin Money which reduced the 5-year fixed rate on its Reward Me Fixed Rate Home Loan to just 2.49% (2.87% comparison rate*) for loans over $300,000.

The new rate is now the lowest in the Mozo database for that term and a full 46 basis points below the average 5-year fixed rate.

Among other changes of note:

  • ME Bank cut 20-40 basis points off its Flexible Home Loan meaning rates are now as low as 2.19% (3.30% comparison rate*) for a 3-year fixed term with the Member Package offer
  • Bank First cut 15 to 20 basis of its Complete Fixed Home Loan which puts the 3-year fixed rate at just 2.09% (2.98% comparison rate*)

To put all of these changes into perspective and to give mortgage holders an idea of how their own rates compare, here are the five lowest rates in the Mozo database (as well as our fixed rate averages) as of September 1, 2020:

TermRate leaderFixed rateAverage
1-yearHomestar1.98% (2.51% comparison rate*)2.56%
2-yearCommunity First Credit Union1.99% (3.25% comparison rate*)2.52%
3-yearBank First1.99% (3.11% comparison rate*)2.59%
4-yearHSBC2.50% (2.95% comparison rate*)2.93%
5-yearVirgin Money2.49% (2.87% comparison rate*)2.95%

Variable rates: Athena introduces automatic rate discounting

Lenders haven’t limited their cuts to fixed rates though. In fact, there was a considerable drop in the average variable rate in the Mozo database over the past month which moved from 3.40% to 3.36%.

A number of recent cuts to headline rates seem to have helped push this change, even from lenders with offers already at the most competitive end of the market. Among the highlights:

  • AMP Bank took 14 basis points off its Variable Rate Loan (Professional Package) which now sits at 2.59% (3.00% comparison rate*) - the lowest variable package rate in our database
  • loans.com.au reduced the rate on its Smart Home Loan by 9 basis point to 2.48% (2.50% comparison rate*)
  • Well Home Loans cut 15 basis points off its Well Balanced offer which puts the new rate at 2.32% (2.35% comparison rate*)

Aside from rate reductions, one of the more interesting trends which has continued to pick up in the past month is the shift towards greater rate discounts for borrowers with lower loan-to-value ratios (LVRs). 

Attracting refinancers - deemed a safer group of borrowers - seems to have become a higher priority for lenders in recent months, and both 86 400 and Athena have introduced new discounted rate tiers for customers with LVRs below 80%, 70% and 60%. 

Athena’s new feature called AcceleRATES, actually automatically reduces the rate a borrower is on as they drop below certain LVR tiers. 

For example, once an owner occupier customer drops below 70% LVR they’ll automatically be shifted from a rate of 2.54% (2.46% p.a. comparison rate*) to a new rate of 2.49% (2.43% p.a. comparison rate*). 

Aside from discounted rates, a number of lenders are also trying to attract refinancers with thousands of dollars in cashback for mortgage holders looking to switch loans. 

RELATED: AcceleRates from Athena rewards borrowers as they pay down their home loan

Now that you’re up to date with the latest rates, could your own home loan rate do with a refresh? Get comparing with some of the great offers in the table below, or pay a visit to the Mozo home loan comparison hub from even more deals from over 80 different lenders.

Home loan comparisons on Mozo

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Last updated 27 July 2024 Important disclosures and comparison rate warning*

Promoted

  • 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.

  • Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.13 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

  • Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Lock in a competitive interest rate and enjoy peace of mind for the fixed period. Available for owner occupied new and refinanced home loans with at least 20% deposit. Split option available as well as offset and redraw. Noapplication, ongoing or banking fees. Third Party fees may be applicable - payable within loan repayments. Extra repayments up to $20K per annum permitted. Apply online, 100% member owned credit union.

  • 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.

  • OMG Home Loan

    • Owner Occupier
    • Principal & Interest
    • <60% LVR
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

  • Flex Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.99 % p.a.
    Fixed 3 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    6.01 % p.a.
    Variable
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $3,001
    Go to site

    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.13 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

  • 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.

  • Flex Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.38 % p.a.
    Initial monthly repayment
    $3,043
    Go to site

    Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

  • 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 $10,000,000.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <70%
    Interest rate
    6.25 % p.a.
    Fixed 3 years
    Comparison rate
    6.42 % p.a.
    Initial monthly repayment
    $3,079
    Go to site

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.54 % p.a.
    Fixed 2 years
    Comparison rate
    7.10 % p.a.
    Initial monthly repayment
    $3,174

    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.

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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

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.

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