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.

Low Rate Home Loans - July 2018 - rates updated daily

  • loans.com.au

    3.64% p.a. variable

    3.66% p.a.

    $1234

    Product details Close details
    Essentials Variable 80

    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. Winner of two Mozo Experts Choice Awards 2018 - Investor Home Loan & Low Cost Home Loan.^

    • 3.64% p.a. variable

    • 3.66% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $50,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Essentials Variable 80

  • HSBC

    3.59% p.a. variable

    3.61% p.a.

    $1234

    Product details Close details
    Discounted Home Value Loan

    Discounted rate for the life of the loan. A relationship manager to help you through the application process.

    • 3.59% p.a. variable

    • 3.61% p.a.

    • $150

    • $0.00

    • $300.00

    • yes - free

    • yes - free online

    • no

    • 90.00%

    • $50,000

    • $7,500,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Discounted Home Value Loan

  • Newcastle Permanent

    3.89% p.a. variable

    4.29% p.a.

    $1234

    Product details Close details
    Discounted Variable Home Loan Premium Plus Package

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

    • 3.89% p.a. variable

    • 4.29% p.a.

    • $0

    • $395.00 yearly

    • $0.00

    • yes - free

    • yes - free

    • yes

    • 90.00%

    • $150,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Discounted Variable Home Loan Premium Plus Package

  • ME

    3.97% p.a. variable

    3.99% p.a.

    $1234

    Product details Close details
    Basic Home Loan

    No fees to redraw & low variable rate. Meet a mobile banker at a time or place that suits you.

    • 3.97% p.a. variable

    • 3.99% p.a.

    • $400

    • $0.00

    • $350.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $40,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

  • Hunter United

    4.19% p.a. variable

    4.19% p.a.

    $1234

    Product details Close details
    Interest Only Owner Occupier Home Loan

    Interest Only could offer the relief you need. Get fast approval on a 2-year interest only owner occupied home loan of $300,000 or more.

    • 4.19% p.a. variable

    • 4.19% p.a.

    • $0

    • $0.00

    • $80.00

    • yes

    • yes - 1st redraw per month free

    • no

    • 80.00%

    • $300,000

    • -

    • Variable

    • Interest Only

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Interest Only Owner Occupier Home Loan

  • Virgin Money

    3.69% p.a. variable

    3.83% p.a.

    $1234

    Product details Close details
    Reward Me Variable Rate Home Loan

    Competitive rates from 3.69% p.a. Plus receive 20,000 Velocity Points for every $100,000 drawn at settlement.

    • 3.69% p.a. variable

    • 3.83% p.a.

    • $150

    • $10.00 monthly

    • $320.00

    • yes - free

    • yes - free

    • yes

    • 80.00%

    • $750,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

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

  • Hot Deal QLD only

    QBANK

    3.84% p.a. variable

    3.87% p.a.

    $1234

    Product details Close details
    Discounted Classic Home Loan

    A low variable Home Loan rate with no monthly fees and flexible repayments.

    • 3.84% p.a. variable

    • 3.87% p.a.

    • $195

    • $0.00

    • $200.00

    • yes - free

    • yes - free

    • no

    • 90.00%

    • $150,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Discounted Classic Home Loan

  • Aussie

    3.84% p.a. variable

    3.85% p.a.

    $1234

    Product details Close details
    Select Basic Variable

    A low rate loan with a range of features, no ongoing management fees, and discounted interest rates to best fit your particular situation.

    • 3.84% p.a. variable

    • 3.85% p.a.

    • $330

    • $0.00

    • $535.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $100,000

    • $5,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Fortnightly, Monthly

    Read our Mozo Review to learn more about the Select Basic Variable

  • AMP

    3.74% p.a. variable

    4.13% p.a.

    $1234

    Product details Close details
    Variable Rate Loan Professional Package

    Benefit from 100% loan offset account with variable rate loan. Redraw any extra funds whenever you like, with no withdrawal fees!

    • 3.74% p.a. variable

    • 4.13% p.a.

    • $295

    • $349.00 yearly

    • $350.00

    • yes - free

    • yes

    • yes

    • 90.00%

    • $500,000

    • $749,999

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Variable Rate Loan Professional Package

  • NAB

    3.99% p.a. variable

    4.03% p.a.

    $1234

    Product details Close details
    Base Variable Rate Home Loan Special Offer

    Low ongoing rate. Free extra repayments and redraw facility. Only 5% deposit and no annual or monthly fees.

    • 3.99% p.a. variable

    • 4.03% p.a.

    • $600

    • $0.00

    • $350.00

    • yes - free

    • yes

    • no

    • 95.00%

    • $20,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Base Variable Rate Home Loan Special Offer

*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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