Top rates for top marks: Australians to be rewarded with cheaper home loans for good credit history
![](http://cdn.mozo.com.au/images/atwood/7579/credit-score-could-determine-your-home-loan-rate_content.jpg)
Australians may soon be rewarded for their good credit history with cheaper home loan and credit card rates under a new initiative set to be announced by Treasurer Scott Morrison at the Intersekt fintech festival in Melbourne later today.
The changes, which are reported to come into effect from July 1 next year, are expected to help borrowers and customers use their good credit history to leverage better deals from providers on a range of financial products including home loans, personal loans, business loans and credit cards.
"This will be a game-changer for both consumers and lenders, and will lead to greater competition in lending and naturally provide better access to finance for Australian households and small businesses," Mr Morrison is expected to say.
"For borrowers, this regime should lead to one thing - a better deal on your mortgage, your personal loan or business loan.”
The announcement will come as part of a larger mandate which will require ANZ, Commonwealth Bank, NAB and Westpac to share more detailed data about their customers credit history in order to improve competition between providers.
"If you have a good credit history - you're paying down your mortgage, you haven't missed a payment on your car loan and your credit cards are under control - you will be able to demand a better deal on your interest rates, or shop around, armed with your data," Mr Morrison will say.
"We intend to start with the four major banks, given they account for approximately 80 per cent of the volume of lending to households. Other credit providers would likely follow suit quickly to improve their competitive position in the market."
Similar systems which reward customers with better credit history already exist in the United Kingdom and United States, and while the Australian initiative is expected to target home loans at first, the Herald Sun has reported that the Federal Government may extend the rules to cover phone and energy providers in the future.
While the changes are likely to be of benefit to those with better credit history, Mozo Data Manager Peter Marshall expects that some Australians may be worse off.
“It’s going to be great for those who are lucky enough to have a great credit history, but those that do have some blemishes on their record can expect to be paying higher rates,” he said.
“The banks are unlikely to want to give up any of their profit margins, so if some consumers are getting better rates it stands to reason that some consumers will be getting worse rates.”
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yes - free
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no
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Mozo experts choice awards won:
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5.99
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$2,995
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.
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5.99
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5.90
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$0
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$0.00
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$0.00
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yes - free
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yes - free
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no
- Maximum loan to value ratio
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- Minimum borrowing amount
- $10,000
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- $10,000,000
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no
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5.99
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$3,001
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$134
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$250
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$0.00
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no
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6.09
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6.13
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$3,027
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.
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6.09
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6.13
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$595
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$0.00
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$250.00
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yes - free
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yes - fees apply
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no
- Maximum loan to value ratio
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- Minimum borrowing amount
- $150,000
- Maximum borrowing amount
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- Type of mortgage
- Variable
- Repayment types
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- Availability
- Owner Occupier
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6.14
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$3,043
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.
- Interest rate
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6.14
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6.16
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$350
- Ongoing fees
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$0.00
- Discharge fee
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$400.00
- Extra repayments
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yes - free
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yes - free
- Offset account
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no
- Maximum loan to value ratio
- 60.00%
- Minimum borrowing amount
- $150,000
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Flex Home Loan
- Owner Occupier
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6.14
%
p.a.
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6.38
%
p.a.
- Initial monthly repayment
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$3,043
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$250
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$250.00 yearly
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$300.00
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yes - free
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yes - free
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yes
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Offset Home Loan
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6.14
%
p.a.
Variable
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$3,043
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6.14
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p.a.
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6.39
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p.a.
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$350
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$248.00 yearly
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$400.00
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yes - free
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yes - free
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yes
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6.25
%
p.a.
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6.20
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$3,079
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6.25
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p.a.
Fixed 3 years
- Comparison rate
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6.20
%
p.a.
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$350
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$0.00
- Discharge fee
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$400.00
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yes - up to $10,000 p.a.
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yes - free
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no
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Offset Home Loan
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6.25
%
p.a.
Fixed 3 years
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6.42
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p.a.
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$3,079
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6.25
%
p.a.
Fixed 3 years
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6.42
%
p.a.
- Upfront fees
-
$350
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$248.00 yearly
- Discharge fee
-
$400.00
- Extra repayments
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yes - up to $10,000 p.a.
- Redraw facility
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yes - free
- Offset account
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yes
- Maximum loan to value ratio
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- Minimum borrowing amount
- $150,000
- Maximum borrowing amount
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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.
- Interest rate
-
6.54
%
p.a.
Fixed 2 years
- Comparison rate
-
7.10
%
p.a.
- Upfront fees
-
$160
- Ongoing fees
-
$0.00
- Discharge fee
-
$160.00
- Extra repayments
-
yes - free up to to lesser of 5% of original fixed loan amount, or $5,000 each year
- Redraw facility
-
no
- Offset account
-
Optional - $10 per month - 1 year fixed term only
- Maximum loan to value ratio
- 80.00%
- Minimum borrowing amount
- $20,000
- Maximum borrowing amount
- -
- Type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special offers
- $3,000 cashback for eligible First Home Buyers, $2,000 cashback when you refinance loans of $250k+, apply from 1 Dec 2022, settle within 180 days.
Read our Mozo Review to learn more about this ANZ Fixed Rate
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Four tips to help your credit score
- Minimise unnecessary spending: The first step to getting your finances back on track is to set a budget and cut out any spending you really don’t need - that way you have more at your disposal to pay off debt.
- Pay those outstanding bills: The longer you delay, the more negative your rating could be. If you are struggling to pay a particular bill, just remember that you can always call your provider to try and negotiate a payment plan.
- Avoid using a credit card for everyday purchases: While a balance transfer offer may be a great way to chip away at your debt, don’t be tempted to use your credit card for everyday purchases when it could just add to your debt and hurt your credit rating.
- Close your unused accounts: In the eyes of credit providers all of those accounts you don’t use but still have open are considered to be potential debt, so if you don’t us them it’s time to close them.
* 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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