Tired of rate hikes? Here are your home loan options

Woman compares home loans on her laptop because she's tired of RBA rate hikes.

After a lovely dry spell, inflation has driven the Reserve Bank of Australia (RBA) to hike rates again – making variable rate home loans more expensive.

Before the November rate hike, the average home loan interest rate for owner-occupiers was 6.61% in the Mozo database. Now that 65 of the lenders we track have announced increases to their rates, the average is now 6.77% – a mere two weeks after the RBA decision. And that’s the average.

There might be more rate hikes on the horizon, too. Every rate rise adds more interest to monthly repayments and piles on the mortgage stress already felt by Aussies. Yet despite the strain, inflation proves dogged.

So what options do home loan borrowers have to avoid rate hikes altogether? Let’s run through the pros and cons.

Fix your home loan interest rate

The most obvious way to avoid RBA rate hikes is to fix your interest rate. Fixed home loans offer one interest rate for a period of time, called a ‘fixed term’ (usually 1-5 years, though some go as high as 7). 

A fixed rate home loan can take the pressure off your budget by guaranteeing consistent mortgage repayments for a while, but before you fix, keep in mind these three crucial cons:

Talk to a financial adviser to see if fixing could be the right solution for you.

Split your home loan interest rate

Want some of the consistency of fixed rates but love the features of a variable rate? A split rate home loan could be the way to go. 

With a split rate, part of your interest is fixed, and part of it is variable. You can choose the proportion of either. For example, 70% of the interest rate could be fixed while the remaining 30% varies with the RBA. 

The main advantage of a split loan is that it’s a partial shield from rate hikes. This could ease some of the uncertainty while giving you the flexibility to enjoy savings when interest rates come down. 

That being said, your split rate won’t drop as much as a pure variable rate, either. This is where a financial adviser – and a mortgage calculator – can help you crunch the numbers.

Look at smaller home loan lenders

Several home loan lenders are trying to innovate ways to deal with the rate hike mortgage crisis. For example, Up Home lets you have up to 50 offset accounts, meaning all your various savers could save you on interest. For refinancers, Unloan comes with an interest rate that drops by 1 basis point every year for up to 30 years over the life of your loan. 

Even smaller players like Northern Inland Credit Union have thrown their hat into the ring with unique features to save. NICU’s Capped Home Loan is a variable rate home loan with a cap of 6.04% p.a. (6.39% p.a. comparison rate*), meaning even when rates rise, they won’t go higher than that maximum or ‘capped’ rate.

All of these loans come with pros and cons, as well as T&Cs, fees, and limits. The point is to do your research, however – there might be more money-saving options than you think.

Refinance your home loan

Refinancing is a classic option for dealing with home loan pain, and many Aussies have taken it up. The value of refinanced home loans hit $18.5 billion in September 2023 – 1.5% higher compared to a year ago, according to the latest lending indicators from the ABS. 

Refinancing can be a stressful process: you essentially have to qualify for a home loan all over, which means tightening up your spending, checking your credit score, and calculating your borrowing power. 

It’s essential to ask yourself some key questions about refinancing, too. What don’t you like about your current lender? Is it just the interest rate, or is it everything? Knowing what isn’t working for you can help you narrow down your home loan comparison search.

Stick with your home loan but find other ways to save interest

If you still like your lender but just need some ways to bring down the cost of your monthly repayments, there are some classic tactics to take. Namely:

  • Call your lender to negotiate.
  • Fill up your offset accounts, if you have them.
  • Make free extra repayments if you can – bonus points if you have a redraw facility.

Interest-saving features exist for a reason, so now’s the time to use them. 

Compare low rate home loans in the table below.

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 using the filters below.
Last updated 14 July 2024 Important disclosures and comparison rate warning*
  • 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.

  • 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.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.19 % p.a.
    Variable
    Comparison rate
    6.23 % p.a.
    Initial monthly repayment
    $3,059
    Go to site

    No application or service fees. Flexibility to choose your repayment schedule (weekly, fortnightly or monthly). Use multiple Everyday Accounts with 100% interest offset to pay your home loan off sooner.

  • 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.

  • 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.

  • 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.

  • 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.

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    6.19 % p.a.
    Variable
    Comparison rate
    6.23 % p.a.
    Initial monthly repayment
    $3,059
    Go to site

    No application or service fees. Flexibility to choose your repayment schedule (weekly, fortnightly or monthly). Use multiple Everyday Accounts with 100% interest offset to pay your home loan off sooner.

  • 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.

  • 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
    6.59 % 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.

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