Why home loan rates are going up

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

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.

Home loan comparisons on Mozo - rates updated daily

loans.com.au

Essentials Variable 80

Owner Occupier, Principal & Interest

interest
rate

3.64% p.a. variable

comparison
rate*

3.66% p.a.

Initial monthly
repayment**

A low-rate home loan that could save you thousands. No monthly or ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount

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- interest rate
  
  3.64% p.a. variable
- comparison rate*
  
  3.66% p.a.
- Upfront fees
  
  $520
- Ongoing fees
  
  $0.00
- Discharge Fee
  
  $0.00
- Extra repayments
  
  yes - free
- Redraw facility
  
  yes - free
- Offset account
  
  no
- Maximum loan to value ratio
  
  80.00%
- Minimum loan amount
  
  $50,000
- Maximum loan amount
  
  $2,000,000
- Type of loan
  
  Variable
- Repayment types
  
  Principal & Interest
- Availability
  
  Owner Occupier
- Repayment options
  
  Weekly, Fortnightly, Monthly
Go to site
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Aussie

Select Basic Variable

LVR<80%, Owner Occupier, Principal & Interest

interest
rate

3.69% p.a. variable

comparison
rate*

3.70% p.a.

Initial monthly
repayment**

A competitive rate with no ongoing fees. Reduce interest by making additional payments.

Call now
- interest rate
  
  3.69% p.a. variable
- comparison rate*
  
  3.70% p.a.
- Upfront fees
  
  $330
- Ongoing fees
  
  $0.00
- Discharge Fee
  
  $535.00
- Extra repayments
  
  yes - free
- Redraw facility
  
  yes - free
- Offset account
  
  no
- Maximum loan to value ratio
  
  80.00%
- Minimum loan amount
  
  $100,000
- Maximum loan amount
  
  $5,000,000
- Type of loan
  
  Variable
- Repayment types
  
  Principal & Interest
- Availability
  
  Owner Occupier
- Repayment options
  
  Fortnightly, Monthly
Call now
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NAB

Base Variable Rate Home Loan

Owner Occupier, Principal & Interest

interest
rate

3.69% p.a. variable

comparison
rate*

3.73% p.a.

Initial monthly
repayment**

$1,250 BONUS WITH AN ELIGIBLE NAB HOME LOAN BANKING BUNDLE*. Low ongoing rate. Free extra repayments and redraw facility. Only 5% deposit and no annual or monthly fees.

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- interest rate
  
  3.69% p.a. variable
- comparison rate*
  
  3.73% p.a.
- Upfront fees
  
  $600
- Ongoing fees
  
  $0.00
- Discharge Fee
  
  $350.00
- Extra repayments
  
  yes - free
- Redraw facility
  
  yes
- Offset account
  
  no
- Maximum loan to value ratio
  
  95.00%
- Minimum loan amount
  
  $20,000
- Maximum loan amount
  
  -
- Type of loan
  
  Variable
- Repayment types
  
  Principal & Interest
- Availability
  
  Owner Occupier
- Repayment options
  
  Weekly, Fortnightly, Monthly
Go to site
Details Close
UBank

UHomeLoan - Discount Offer

Owner Occupier, Principal & Interest

interest
rate

3.59% p.a. variable

comparison
rate*

3.59% p.a.

Initial monthly
repayment**

A low rate Home Loan with no bank fees on variable rate loans. Easy & fast to apply. Choose between flexible repayments and make extra repayments for free on a variable rate home loan.

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- interest rate
  
  3.59% p.a. variable
- comparison rate*
  
  3.59% p.a.
- Upfront fees
  
  $0
- Ongoing fees
  
  $0.00
- Discharge Fee
  
  $0.00
- Extra repayments
  
  yes - free
- Redraw facility
  
  yes
- Offset account
  
  no
- Maximum loan to value ratio
  
  80.00%
- Minimum loan amount
  
  $200,000
- Maximum loan amount
  
  $699,999
- Type of loan
  
  Variable
- Repayment types
  
  Principal & Interest
- Availability
  
  Owner Occupier
- Repayment options
  
  Weekly, Fortnightly, Monthly
Go to site
Details Close
State Custodians

Low Rate Home Loan with Offset

LVR<80%, Owner Occupier, Principal & Interest

interest
rate

3.68% p.a. variable

comparison
rate*

3.71% p.a.

Initial monthly
repayment**

A Low Rate Home Loan with a $0 Application Fee, Free Redraws & Extra Repayments

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- interest rate
  
  3.68% p.a. variable
- comparison rate*
  
  3.71% p.a.
- Upfront fees
  
  $286
- Ongoing fees
  
  $0.00
- Discharge Fee
  
  $300.00
- Extra repayments
  
  yes - free
- Redraw facility
  
  yes - free
- Offset account
  
  yes
- Maximum loan to value ratio
  
  80.00%
- Minimum loan amount
  
  $100,000
- Maximum loan amount
  
  $2,000,000
- Type of loan
  
  Variable
- Repayment types
  
  Principal & Interest
- Availability
  
  Owner Occupier
- Repayment options
  
  Weekly, Fortnightly, Monthly
Go to site
Details Close
Newcastle Permanent

Discounted Variable Home Loan

Owner Occupier, Principal & Interest

interest
rate

3.72% p.a. variable

comparison
rate*

4.12% p.a.

Initial monthly
repayment**

Experts Choice - Australia's Best Customer-Owned Banking & Home Lender of the Year 2018

Call now
Go to site
- interest rate
  
  3.72% p.a. variable
- comparison rate*
  
  4.12% p.a.
- Upfront fees
  
  $0
- Ongoing fees
  
  $395.00 yearly
- Discharge Fee
  
  $0.00
- Extra repayments
  
  yes - free
- Redraw facility
  
  yes - free
- Offset account
  
  yes
- Maximum loan to value ratio
  
  90.00%
- Minimum loan amount
  
  $150,000
- Maximum loan amount
  
  -
- Type of loan
  
  Variable
- Repayment types
  
  Principal & Interest
- Availability
  
  Owner Occupier
- Repayment options
  
  Weekly, Fortnightly, Monthly
Call now
Go to site
Details Close
ME

Flexible Home Loan

Owner Occupier, LVR<80%, Principal & Interest

interest
rate

3.69% p.a. variable

comparison
rate*

4.11% p.a.

Initial monthly
repayment**

A flexible Home Loan with Member Package for Owner Occupiers including a low rate, redraw and offset. Annual fee $395. Experts Choice - Australia's Best Bank 2018.

Call now
Go to site
- interest rate
  
  3.69% p.a. variable
- comparison rate*
  
  4.11% p.a.
- Upfront fees
  
  $0
- Ongoing fees
  
  $395.00 yearly
- Discharge Fee
  
  $300.00
- Extra repayments
  
  yes - free
- Redraw facility
  
  yes - free
- Offset account
  
  yes
- Maximum loan to value ratio
  
  80.00%
- Minimum loan amount
  
  $400,000
- Maximum loan amount
  
  $699,999
- Type of loan
  
  Variable
- Repayment types
  
  Principal & Interest
- Availability
  
  Owner Occupier
- Repayment options
  
  Weekly, Fortnightly, Monthly
Call now
Go to site
Details Close
SCU

First Home Buyer Loan

Up to 40 Year Term

interest
rate

3.77% p.a. variable

comparison
rate*

3.81% p.a.

Initial monthly
repayment**

Affordable 40-year loan term. Receive assistance with applying for the first home owner grant. Borrow up to 95% of property value.
- interest rate
  
  3.77% p.a. variable
- comparison rate*
  
  3.81% p.a.
- Upfront fees
  
  $695
- Ongoing fees
  
  $0.00
- Discharge Fee
  
  $180.00
- Extra repayments
  
  yes - free
- Redraw facility
  
  yes - $50
- Offset account
  
  no
- Maximum loan to value ratio
  
  95.00%
- Minimum loan amount
  
  $150,000
- Maximum loan amount
  
  -
- Type of loan
  
  Variable
- Repayment types
  
  Principal & Interest
- Availability
  
  Owner Occupier
- Repayment options
  
  Weekly, Fortnightly, Monthly
Details Close
Featured Product

Heritage Bank

Discount Variable Home Loan

Owner Occupier, LVR<80%

interest
rate

3.67% p.a. variable

comparison
rate*

3.69% p.a.

Initial monthly
repayment**

Heritage's current lowest variable interest rate. Unlimited extra repayments and unlimited redraw.

Go to site
- interest rate
  
  3.67% p.a. variable
- comparison rate*
  
  3.69% p.a.
- Upfront fees
  
  $150
- Ongoing fees
  
  $0.00
- Discharge Fee
  
  $250.00
- Extra repayments
  
  yes - free
- Redraw facility
  
  yes - fees apply
- Offset account
  
  no
- Maximum loan to value ratio
  
  80.00%
- Minimum loan amount
  
  $150,000
- Maximum loan amount
  
  -
- Type of loan
  
  Variable
- Repayment types
  
  Principal & Interest
- Availability
  
  Owner Occupier
- Repayment options
  
  Weekly, Fortnightly, Monthly
Go to site
Details Close
IMB Bank

Accelerator Home Loan

Owner Occupier, Principal & Interest, LVR<95%

interest
rate

3.59% p.a.variable for 24 months and then 4.52% p.a. variable

comparison
rate*

4.38% p.a.

Initial monthly
repayment**

You’ll only need a 5% deposit to enter the market with this loan. Life-of-loan discount off the standard variable rate & special discounted rate for the first 2 years
- interest rate
  
  3.59% p.a.variable for 24 months and then 4.52% p.a. variable
- comparison rate*
  
  4.38% p.a.
- Upfront fees
  
  $324
- Ongoing fees
  
  $0.00
- Discharge Fee
  
  $270.00
- Extra repayments
  
  yes - free
- Redraw facility
  
  yes - free
- Offset account
  
  yes
- Maximum loan to value ratio
  
  95.00%
- Minimum loan amount
  
  $75,000
- Maximum loan amount
  
  $5,000,000
- Type of loan
  
  Variable
- Repayment types
  
  Principal & Interest
- Availability
  
  Owner Occupier
- Repayment options
  
  Weekly, Fortnightly, Monthly
Details Close

*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.

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

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