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

Kelly Emmerton

14 Nov 2017

redactor/hero-images/163/home-loans-rate-cut_content.jpg

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. Advertiser disclosure.

  • loans.com.au

    1.99% p.a.variable for 12 months and then 2.48% p.a.

    2.47% p.a.

    $1234

    Product details Close details
    Smart Booster Home Loan

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required.

    • 1.99% p.a.variable for 12 months and then 2.48% p.a.

    • 2.47% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • Optional - with 0.10% additional interest

    • 80.00%

    • $520

    • $50,000

    • $1,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

  • UBank
    Mozo Expert Choice Badge

    2.34% p.a.

    2.34% p.a.

    $1234

    Product details Close details
    UHomeLoan - Discount Offer

    Enjoy a super low rate, $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Free redraw with flexible repayments. Min 20% deposit.

    • 2.34% p.a.

    • 2.34% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $0

    • $100,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

  • Athena
    Mozo Expert Choice Badge

    2.19% p.a.

    2.19% p.a.

    $1234

    Product details Close details
    Celebrate Variable Home Loan

    Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^

    • 2.19% p.a.

    • 2.19% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 60.00%

    • $0

    • $100,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

  • Macquarie

    2.64% p.a.

    2.64% p.a.

    $1234

    Product details Close details
    Basic Home Loan

    Flexible loan structure – create up to six loan accounts with different rate and repayment types. Free redraw from your loan using Macquarie Online.

    • 2.64% p.a.

    • 2.64% p.a.

    • $0

    • $0.00

    • $400.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $0

    • $150,000

    • $749,999

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Monthly

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

  • 86 400

    2.19% p.a.

    2.20% p.a.

    $1234

    Product details Close details
    Neat Home Loan

    Competitive variable rate. Borrowers choose their repayment schedule (weekly, fortnightly or monthly) and can also make extra repayments. Redraw facility available. Simple online application process.

    • 2.19% p.a.

    • 2.20% p.a.

    • $250

    • $0.00

    • $300.00

    • yes - free

    • yes - free

    • no

    • 60.00%

    • $250

    • $80,000

    • $5,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

^See information about the Mozo Experts Choice Home loans Awards

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.