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

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 - last updated 13 August 2022

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

    Details
  • Smart Booster Home Loan

    1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    3.74% p.a.variable for 12 months and then 4.23% p.a. variable
    4.22% p.a.

    Already includes July RBA rate increase. No monthly or ongoing fees. loans.com.au has some of the fastest settlement times on the market. They can meet 30-day settlement timeline so you can start saving thousands, as soon as possible! Mozo award-winning online lender, friendly and local Australian based team.

    Details
  • First Home Buyer Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    4.14% p.a. variable
    4.17% p.a.

    A low variable rate loan for home buyers. No establishment or ongoing fees to pay. 100% offset account included. Allows for unlimited repayments, redraws and flexible repayment options.

    Details
  • Variable Home Loan

    <80% LVR, Owner Occupier, Interest Only

    interest rate
    comparison rate
    Initial monthly repayment
    4.74% p.a. variable
    4.19% p.a.

    Fast online application with no fees. Free extra repayments and redraw facility. Min 20% deposit.

    Details

* 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.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. 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.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.