‘Tis the season - for first home buyer mortgage rate cuts

Kelly Emmerton

14 Nov 2017

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As the spring property season draws to a close, lenders are slashing interest rates on owner occupier home loans in preparation for a flood of first home buyer activity, Mozo data has shown.

Since the start of October, no less than thirty lenders from Mozo’s database have lowered variable rates on at least one of their home loan products. And according to Mozo Director Kirsty Lamont, the recent rate reductions come just at the right time for first home buyers.

Factors such as cooling house prices in key markets and stamp duty exemptions in Victoria and New South Wales have opened the door for young property hopefuls recently. APRA’s moves to tighten lending standards this year have also meant investors are treading a little more carefully - leaving some much-needed elbow room for first home buyers looking to break into what has been a red hot market.

“The end of the spring property season has brought with it some more welcoming conditions for first home buyers and lenders are clearly ready to entice these borrowers in with rock bottom home loan rates,” said Lamont.

The average cut for an owner occupier borrower making principal and interest repayments was 15 basis points, but one lender cut its rates by more than five times that amount. There are now 70 lenders in Mozo’s database offering up rates under 4.00%, with the lowest rate in market now a seriously competitive 3.39%.

“These days, lenders really want to have a headline variable rate with a ‘3’ out in front in order to attract money-savvy borrowers,” said Lamont.

Low rate variable home loans - rates updated daily

  • Promoted

    UBank

    2.84% p.a.Apply now to get this rate from 29 Oct

    2.84% p.a.Apply now to get this rate from 29 Oct

    $1234

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    UHomeLoan - Discount Offer

    Rate drop to a super low 2.84% p.a. variable effective on 29/10/2019. Current rate from 3.09% p.a. variable. Free redraw with flexible repayments. Min 20% deposit. Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category^.

    • 2.84% p.a.Apply now to get this rate from 29 Oct

    • 2.84% p.a.Apply now to get this rate from 29 Oct

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $200,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the UHomeLoan - Discount Offer

  • Promoted

    Athena

    2.84% p.a.

    2.80% p.a.

    $1234

    Product details Close details
    Variable Home Loan

    Get the rate cut you deserve from one of Australia's newest direct lenders. For the third time this year the full cut has been passed on to all customers. The same low rates for new and existing customers. No fees and fee-free redraw. Refinance only. Min 20% deposit.

    • 2.84% p.a.

    • 2.80% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $100,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Variable Home Loan

  • Promoted

    loans.com.au

    2.88% p.a.

    2.90% p.a.

    $1234

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    Smart Home Loan

    A low-rate home loan that could save you thousands. No application or ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount, Limited time only.

    • 2.88% p.a.

    • 2.90% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $50,000

    • $1,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Smart Home Loan

  • Promoted

    ME

    3.34% p.a.

    3.78% p.a.

    $1234

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    Flexible Home Loan Member Package

    A flexible Home Loan with Member Package for Owner Occupiers including a low rate, redraw and offset. Annual fee $395.

    • 3.34% p.a.

    • 3.78% p.a.

    • $200

    • $395.00 yearly

    • $350.00

    • yes - free

    • yes - free

    • yes

    • 80.00%

    • $400,000

    • $699,999

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Flexible Home Loan

  • Promoted

    Well Home Loans

    2.82% p.a.

    2.86% p.a.

    $1234

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    Well Balanced

    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. Best New Home Loan in Mozo Experts Choice Awards 2019.^

    • 2.82% p.a.

    • 2.86% p.a.

    • $785

    • $0.00

    • $300.00

    • yes - free

    • yes - free

    • Optional - $10 per month

    • 80.00%

    • $200,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Well Balanced

*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 the amount and term you entered.

**Initial monthly repayment figures are estimates only, based on the advertised rate, and a loan of $500,000 repaid over 25 years. 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.

Tips for choosing a low rate home loan

  • Use the comparison rate. When you go to compare a list of home loans to work out which one will cost you less, it’s important to take into account all the costs. Looking at the comparison rate is the easiest way to do this. This rate takes into account the interest rate and any set fees you’ll pay, to give you a better idea of the “true” cost of the loan.

  • Don’t get tied up in the features. While features like an offset account or redraw facility might be handy and could even save you money, if you don't actually use them, then they aren’t worth having. Full feature home loans often come with higher rates - so if you won’t use the features you’re usually better off opting for a basic option with a lower rate and fees.

  • Shop around before signing. There are a tonne of home loan options out there, and finding the right fit for your needs is key. So before you sign on the dotted line - in fact, before you even apply - make sure you compare home loans and find an option that suits you down to the ground.

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