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. Advertiser disclosure.

  • loans.com.au

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

    2.47% p.a.

    $1234

    Product details Close details
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    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. variable

    • 2.47% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • Optional - with 0.10% additional interest

    • $520

    • 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 Booster Home Loan

    Go to site
  • Athena

    2.19% p.a. variable

    2.19% p.a.

    $1234

    Product details Close details
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    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. variable

    • 2.19% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • $0

    • 60.00%

    • $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

    Go to site
  • UBank

    2.34% p.a. variable

    2.34% p.a.

    $1234

    Product details Close details
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    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. variable

    • 2.34% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • $0

    • 80.00%

    • $100,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

    Go to site
  • Virgin Money

    2.04% p.a.
    fixed 3 years

    2.73% p.a.

    $1234

    Product details Close details
    Go to site
    Special Offer Reward Me Fixed Rate Home Loan

    Enjoy $3,000 cashback when you refinance with Virgin Money (T&Cs apply). Additional repayments up to $10,000 per annum. Reverts to the discounted variable rate on expiry of the fixed term.

    • 2.04% p.a.
      fixed 3 years

    • 2.73% p.a.

    • $450

    • $10.00 monthly

    • $350.00

    • yes - up to $10,000 per annum

    • no

    • no

    • $450

    • 80.00%

    • $300,000

    • -

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • $3,000 cashback for new borrowings of at least $300,000 with applications made by 22 Jan 2021 and settled by 23 April 2021.

    Read our Mozo Review to learn more about the Special Offer Reward Me Fixed Rate Home Loan

    Go to site

  • Hot Deal Cash bonus offer!

    Suncorp

    1.89% p.a.
    fixed 2 years

    2.94% p.a.

    $1234

    Product details Close details
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    Fixed Home Loan Special Offer Home Package Plus

    No monthly account keeping fees & No loan establishment fee. Get a $2,000 cash bonus when you refinance with an eligible Suncorp Bank Home Loan of $250k+. T&Cs & eligibility criteria apply.

    • 1.89% p.a.
      fixed 2 years

    • 2.94% p.a.

    • $0

    • $375.00 yearly

    • $350.00

    • yes - free up to $500 per month

    • no

    • no

    • $0

    • 80.00%

    • $150,000

    • -

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

    Go to site

  • Hot Deal $3,000 cashback when you refinance your home loan to BOQ (T&Cs apply)

    Bank of Queensland

    1.99% p.a.
    fixed 4 years

    2.90% p.a.

    $1234

    Product details Close details
    Discount Fixed Rate

    Have the certainty of fixed repayments with a competitive rate from BOQ. Flexible repayment options available and make up to $5,000 in additional repayments annually. $3,000 cashback when you refinance your home loan to BOQ (min. $250k lending, max 80% LVR, T&Cs apply).

    • 1.99% p.a.
      fixed 4 years

    • 2.90% p.a.

    • $450

    • $10.00 monthly

    • $350.00

    • yes - free up to $5,000 p.a

    • no

    • no

    • $450

    • 80.00%

    • $150,000

    • -

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • $3,000 cashback when you refinance your home loan to BOQ, min $250,000, 80% LVR or less. Apply before 19 December 2020, settle by 28 February 2021.

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

  • UBank

    1.95% p.a.
    fixed 3 years

    2.27% p.a.

    $1234

    Product details Close details
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    UHomeLoan

    $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

    • 1.95% p.a.
      fixed 3 years

    • 2.27% p.a.

    • $395

    • $0.00

    • $0.00

    • yes - free up to $20,000 p.a.

    • no

    • no

    • $395

    • 80.00%

    • $100,000

    • $2,000,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • $395 Establishment fee waived for fixed rate loans that settle by 31 March 2020.

    Read our Mozo Review to learn more about the UHomeLoan

    Go to site
  • Illawarra Credit Union

    1.99% p.a.variable for 24 months and then 2.50% p.a. variable

    2.93% p.a.

    $1234

    Product details Close details
    Go to site
    The Works Special Variable Home Loan

    The Works Package 2 year intro special variable rate Home Loan, for new owner occupied P&I home loans $150k and over. It comes with a 100% offset account to make your home loan repayments

    • 1.99% p.a.variable for 24 months and then 2.50% p.a. variable

    • 2.93% p.a.

    • $1,282

    • $395.00 yearly

    • $350.00

    • yes - free

    • yes - free

    • yes

    • $1,282

    • 95.00%

    • $150,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

    Go to site
  • Newcastle Permanent

    2.59% p.a. variable

    2.63% p.a.

    $1234

    Product details Close details
    Go to site
    Special Real Deal Home Loan

    Enjoy a great low rate with no ongoing fees. Ability to split your loan between fixed and variable. 100% offset account. Refinance and get $2,000 cashback for home loans over $250k with LVR ≤80%. Limited time offer extended, T&Cs apply.

    • 2.59% p.a. variable

    • 2.63% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - fees apply

    • yes - partial only

    • $0

    • 80.00%

    • $150,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • $2,000 cashback when you refinance your home loan from another financial institution when you apply by 31 January 2021 and are funded by 31 March 2021, min $250k, LVR <80%

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

    Go to site

  • Hot Deal Vic customers only

    GMCU

    2.40% p.a.
    fixed 2 years

    3.73% p.a.

    $1234

    Product details Close details
    Go to site
    Fixed

    GMCU competitive 2 year fixed rates as low as 2.40% p.a. (3.73% p.a. comparison rate). Offset account available and free extra repayments.

    • 2.40% p.a.
      fixed 2 years

    • 3.73% p.a.

    • $300

    • $8.00 monthly

    • $150.00

    • yes - free

    • yes - fees apply

    • yes

    • $300

    • 95.00%

    • $30,000

    • -

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • $2,000 cash back for First Home Buyers with new borrowings $150k - $500k to those eligible for the Victorian Government First Home Owner Grant or First Home Buyer Duty Reduction Loan. Applications made by 30 Nov 2020, funded by 31 May 2021.

    Read our Mozo Review to learn more about the Fixed

    Go to site

^See information about the Mozo Experts Choice Home loans Awards

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

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