‘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

  • Hot Deal Brand New Offer

    loans.com.au

    3.48% p.a.

    3.50% p.a.

    $1234

    Product details Close details
    Go to site
    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.

    • 3.48% p.a.

    • 3.50% 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

    Go to site

  • HSBC

    3.59% p.a.

    3.61% p.a.

    $1234

    Product details Close details
    Go to site
    Discounted Home Value Loan

    Discounted rate for the life of the loan. A relationship manager to help you through the application process.

    • 3.59% p.a.

    • 3.61% p.a.

    • $150

    • $0.00

    • $300.00

    • yes - free

    • yes - free online

    • no

    • 90.00%

    • $50,000

    • $7,500,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Discounted Home Value Loan

    Go to site

  • Athena

    3.49% p.a.

    3.51% p.a.

    $1234

    Product details Close details
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    Opening Offer Variable Home Loan - Refinance Only

    No application fees, no monthly fees & no annual fees. Stay-great rates for the entirety of the loan, so you pay it off faster.

    • 3.49% p.a.

    • 3.51% p.a.

    • $488

    • $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 Opening Offer Variable Home Loan - Refinance Only

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  • Bank Australia

    3.76% p.a.

    3.77% p.a.

    $1234

    Product details Close details
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    Basic Home Loan Special

    A Basic Home Loan which offers a competitive interest rate and other features to make your home or investment loan more affordable. Option to fix full loan or split between fixed and variable.No establishment fee until 31/03/2019. Redraw available.

    • 3.76% p.a.

    • 3.77% p.a.

    • $0

    • $0.00

    • $250.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $10,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Basic Home Loan Special

    Go to site

  • ME

    3.97% p.a.

    3.99% p.a.

    $1234

    Product details Close details
    Go to site
    Basic Home Loan

    No fees to redraw & low variable rate. Meet a mobile banker at a time or place that suits you.

    • 3.97% p.a.

    • 3.99% p.a.

    • $400

    • $0.00

    • $350.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $40,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

    Go to site

*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.

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.

Mozo may receive advertising fees from the financial institutions, issuers of financial or credit products and third party advice providers that are shown on this page. These fees are based on a cost per click, cost per acquisition, or a fixed fee.

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