Will banks be forced to slash home loan rates as buyer intention drops?

Monika Gudova

23 Nov 2018

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With shiny new homes boasting rustic charm showing up on the radar every day, and property prices falling lower than they’ve been in years, it may come as a shock that Aussies aren’t as keen to get a home loan as they were last year.

Research from Roy Morgan has shown that in the three months to October, 1.21 million Australians had the intention of taking out a home loan in the next twelve months, down 17.7% from the year before.

To put this in perspective, in October 2017, 7.3% of the population said they had the intention of taking out a home loan, which dropped to 5.9% in October 2018.

RELATED: Fed up Aussie borrowers dump banks in droves

The data revealed the main group driving these changes to be first home borrowers. In October 2018, 411,000 first home borrowers intended to take out a loan in the next 12 months, down 44.5% from the year before.

Roy Morgan Industry Communications Director, Norman Morris, suggested that without these prospective borrowers, banks could face difficulties in the coming year.

“The decline in home loan intenders over the last year is likely to have a major impact on banks in the coming year, particularly as the drop has come from first home buyers who are major generators of increasing volumes,” he said.

He suggested that the reduction in first home buyers likely had to do with uncertainty in the face of falling house prices, interest rate movements, mortgage stress and job risks.

Mozo Property Expert, Steve Jovcevski, agreed and suggested that rate cuts could be on the horizon as a result.

“It’s hard to shift the blame on any one thing, but it’s likely that a drop in those intending to borrow is a result of big and small banks alike hiking up their home loan rates in recent months, as well as announcements of tighter lending criteria,” he said.

“But what this means now is banks could possibly start looking at cutting rates as a way to attract borrowers in certain segments of the market.”

RELATED: All big 4 banks hike home loan rates - is now a good time to refinance?

In contrast, the largest group of Australians intending to take out a home loan in the next 12 months were was found to be refinancers, which accounted for almost half (45.4%) of the total group.

“For the same reason first home buyers are avoiding the property market, homeowners who have just had their rate hiked up are looking for a better deal on their mortgage,” Jovcevski said.

It’s never too early to start looking for a home loan, and if you’re one of the 1.21 million Australians on the hunt for a better mortgage rate, we’ve got some great offers lined up below to kick you off.

Nothing tickle your fancy? We’ve got over 500 home loans in our comparison tables, so you’re sure to find one that not only carries a great rate, but great features too.

First home loans - rates updated daily

  • Promoted

    HSBC

    3.69% p.a. variable

    3.70% p.a.

    $1234

    Product details Close details
    Discounted Home Value Loan

    Enjoy unlimited free extra repayments and no ongoing service fees when you apply by 31 July (t&cs apply). Get help with the application process with an HSBC relationship manager. Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category.^

    • 3.69% p.a. variable

    • 3.70% 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

  • Promoted

    loans.com.au

    3.64% p.a. variable

    3.66% p.a.

    $1234

    Product details Close details
    Essentials Variable 90

    This low-rate home loan that could save you thousands! With no monthly or ongoing fees and the ability to make unlimited additional repayments. This home loan from popular online lender loans.com.au also features unlimited free redraws with no minimum redraw amount.

    • 3.64% p.a. variable

    • 3.66% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 90.00%

    • $50,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Essentials Variable 90

  • Promoted

    RACQ Bank

    3.69% p.a. variable

    3.69% p.a.

    $1234

    Product details Close details
    Mortgage Saver Special

    $0 Establishment fee. Plus 15% off Home & Contents Insurance for the life of the loan with Home Plus. T&Cs apply. QLD Residents only.

    • 3.69% p.a. variable

    • 3.69% p.a.

    • $0

    • $0.00

    • $297.00

    • yes - free

    • yes - free

    • no

    • 95.00%

    • $20,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Mortgage Saver Special

  • Promoted

    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

    • $530.00

    • yes - free

    • yes - free

    • no

    • 95.00%

    • $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

  • Promoted

    Tic:Toc

    3.47% p.a. variable

    3.48% p.a.

    $1234

    Product details Close details
    Variable Home Loan

    Get full approval online. Tic:Toc’s award-winning platform could save you thousands with low rates and no application, valuation or settlement fees. Fee free redraws and extra repayments. Add an optional offset account for $10 per month. Mozo Experts Choice Awards - Online Home Lender of the Year 2019

    • 3.47% p.a. variable

    • 3.48% 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

*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.

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