Why home loan rates are going up

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Kelly Emmerton

02 Jul 2018

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  • Lenders start hiking home loan rates, big banks predicted to follow

  • Switching to the lowest home loan rate could save hundreds each month

Compare low home loan rates now >>

The Reserve Bank is expected to keep the cash rate on hold again today, but mortgage lenders are bumping up rates for Aussie borrowers anyway and the big banks are expected to follow.

The rate rises reflect the rising cost of funding for Aussie banks, with smaller lenders such as ING, Bank of Queensland and ME among the first to cave in and pass costs along to customers.

“Borrowers need to prepare for more rate rises in coming months, with the nation's big banks unlikely to be able to absorb increased overseas funding costs for much longer,” says Mozo Director Kirsty Lamont.

“One of the best ways to avoid rate hike pain is to refinance to a cheaper home loan now. Switching from the average home loan rate to the lowest rate in Mozo’s database could mean a yearly saving of $2,100. And having those extra funds available could make a huge difference to your budget,” says Lamont^.

Get started by comparing low rate home loans in the table below.

Low Rate Home Loans - July 2018 - rates updated daily

  • Promoted

    loans.com.au

    2.88% p.a. variable

    2.90% 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, Limited time only.

    • 2.88% p.a. variable

    • 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

    Go to site

  • Promoted

    UBank

    2.84% p.a. variable

    2.84% p.a.

    $1234

    Product details Close details
    Go to site
    UHomeLoan - Discount Offer

    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. variable

    • 2.84% p.a.

    • $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

    Go to site

  • Promoted

    Athena

    2.84% p.a. variable

    2.80% p.a.

    $1234

    Product details Close details
    Go to site
    Variable Home Loan

    Get the low rate you deserve with Athena, one of Australia's newest direct lenders. No fees and fee-free redraw. The same low rates for new and existing customers. Score loyalty bonus for making repayments. Min 20% deposit.

    • 2.84% p.a. variable

    • 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

    Go to site

  • Promoted

    Tic:Toc

    2.79% p.a. variable

    2.80% p.a.

    $1234

    Product details Close details
    Go to site
    Variable Home Loan

    Get full approval online. Award-winning platform could save you thousands with super-low rates. No application, valuation or settlement fees. Fee-free redraws and extra repayments. Optional offset account for $10 per month. Winner of a Mozo Experts Choice Award 2019 for Online Home Lender of the Year 2019.^

    • 2.79% p.a. variable

    • 2.80% p.a.

    • $0

    • $0.00

    • $325.00

    • yes - free

    • yes - free

    • Optional - $10 per month

    • 90.00%

    • $50,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

    Go to site

  • Promoted

    Homestar

    2.74% p.a. variable

    2.77% p.a.

    $1234

    Product details Close details
    Go to site
    Star Essentials Home Loan

    One of the lowest home loan rates in town packed with essential features. No application or ongoing fees. Unlimited additional repayments with free online redraws. Min. loan size $150k, no construction loans.

    • 2.74% p.a. variable

    • 2.77% p.a.

    • $596

    • $0.00

    • $535.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $150,000

    • $850,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Star Essentials Home Loan

    Go to site

  • Promoted

    Well Home Loans

    2.82% p.a. variable

    2.86% p.a.

    $1234

    Product details Close details
    Go to site
    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. variable

    • 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

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  • Promoted

    Queensland Country Credit Union

    3.49% p.a.
    fixed 3 years

    3.90% p.a.

    $1234

    Product details Close details
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    RateSaver

    No Annual or Monthly Loan Maintenance Fees. Pay up to $10,000 in additional repayments each year. Borrow up to 90% LVR.

    • 3.49% p.a.
      fixed 3 years

    • 3.90% p.a.

    • $500

    • $0.00

    • $0.00

    • yes - up to $10,000 per year

    • no

    • no

    • 90.00%

    • $100,000

    • $5,000,000

    • Fixed

    • Interest Only

    • Investor

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the RateSaver

    Go to site

  • Promoted

    IMB Bank

    3.13% p.a. variable

    3.19% p.a.

    $1234

    Product details Close details
    Budget Home Loan

    Start with only 10% minimum deposit. Unrestricted additional repayments and free redraw facility.

    • 3.13% p.a. variable

    • 3.19% p.a.

    • $799

    • $0.00

    • $350.00

    • yes - free

    • yes - free

    • no

    • 90.00%

    • $75,000

    • $5,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

  • Promoted

    CUA

    3.20% p.a. variable

    3.25% p.a.

    $1234

    Product details Close details
    Go to site
    Achieve Variable Home Loan

    No annual or monthly account keeping fees. Enjoy the flexibility of being able to make unlimited extra repayments without penalty. Borrow up to 90% of the property value.

    • 3.20% p.a. variable

    • 3.25% p.a.

    • $835

    • $0.00

    • $500.00

    • yes - free

    • yes - free

    • yes - partial up to $15,000 maximum

    • 90.00%

    • $100,000

    • $249,999

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

    Go to site

  • Promoted

    Bank of Queensland

    2.99% p.a.
    fixed 3 years

    3.72% p.a.

    $1234

    Product details Close details
    Discount Fixed Rate 300k+

    Minimum loan amount of $300k. 20% deposit needed. Free additional repayments up to $5,000 per year.

    • 2.99% p.a.
      fixed 3 years

    • 3.72% p.a.

    • $450

    • $10.00 monthly

    • $320.00

    • yes - free up to $5,000 p.a

    • no

    • no

    • 80.00%

    • $300,000

    • -

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Discount Fixed Rate 300k+

*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.

^Based on a $300,000 variable rate, principal and interest home loan over 25 years. Average variable rate 4.35%.

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