Mozo Money Moves: Fixed rate cuts moderating, cheap home loan picks, AI trading risks and the real rate of return for savers

Welcome to Mozo Money Moves, your weekly round-up of what's moving your money and shaping your financial decisions. This week, we're taking a deep dive into the home loan market, where fixed rates are continuing their free fall, with an increasing number of lenders now offering rates below 5%. We'll also cover a surprise rate cut from one of Australia's largest customer-owned banks, a look at cheap home loan picks this week, and a head-to-head matchup of trading platforms. Plus, we've got new research on how Aussies would spend a $10,000 windfall and insights into the risks of AI trading advice.

Let's get into it.

Fixed rate cuts could lose steam after sub-5% surge

Australia’s fixed home loan market has been in overdrive in recent months, with lenders rushing to trim rates and lure borrowers back to fixed deals. For the first time in years, borrowers could find 1, 2 and even 3-year fixed terms starting below 5 percent. But this week, signs emerged that the tide may be turning.

Mozo’s research shows that while more than 12 lenders are now offering sub-5 percent fixed rates, the pace of cuts has eased considerably. With wholesale swap rates stabilising, banks may consider pausing fixed rate cuts, raising the possibility that the sharpest discounts may already be behind us.

Mozo banking expert Peter Marshall says, “Some analysts suggest that there might only be one or two more cuts from the RBA in the current cycle. Cuts to fixed rates during August were fewer and smaller than we’ve seen for the previous few months. If the outlook for the economy stays the same we may not see fixed rates fall much further than they are now.”

Fixed loans may be attractive to households seeking certainty in repayments, especially against a backdrop of cost-of-living pressures. But with competition in the variable home loans space heating up, many borrowers may now be weighing whether the security of a fixed rate outweighs the flexibility of staying variable.

Here are the current leaders in Mozo’s database for 1, 2 and 3-year fixed terms:

1-year fixed home loan rate leaders

2-year fixed home loan rate leaders

3-year fixed home loan rate leaders

Source: mozo.com.au as at 12 September 2025. Leading fixed rates for owner occupier, principal & interest home loans at $500,000, at 80% loan to value ratio, excluding first home buyer and 'green' home loans with environmentally friendly requirements.

*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.

Greater Bank cuts variables again

While the fixed market shows signs of cooling, competition on variable loans remains fierce. This week, Greater Bank announced its second round of variable home loan cuts in as many weeks, making it one of the most aggressive movers in the market right now.

By lowering rates twice in quick succession, the regional bank is signalling its intent to capture a larger share of refinancers – particularly those frustrated by sluggish moves from the Big Four. The cuts sharpen Greater’s position against both larger banks and other customer-owned competitors, with some of its offers now among the lowest variable rates nationally.

For borrowers, the ongoing activity suggests lenders are anticipating a prolonged period of stable monetary policy. With the RBA widely expected to hold the cash rate steady later this month, competition on variable products could intensify as banks focus on pricing to win over customers.

This week’s cheap home loan picks

Mozo’s latest research into Australia’s cheap home loans has thrown the spotlight on just how wide the gap has grown between market-leading deals and the rates on offer from the major banks.

Leading smaller lenders continue to dominate the tables, with many advertising headline variable rates just above 5 percent. In contrast, the Big Four banks are still sitting noticeably higher, leaving a growing number of borrowers to question whether loyalty is worth the cost.

For refinancers in particular, switching to one of the sharpest deals on the market could translate into thousands of dollars in savings each year. With fixed rates potentially stabilising and variable cuts continuing, the cheap deals available now remain a powerful incentive for homeowners to review their loans.

CMC vs CommSec – online share trading showdown

Two of Australia’s online trading platforms, CommSec and CMC Invest, went under the microscope this week in a Mozo comparison pitting features, fees and usability side by side.

CommSec remains the country’s most recognisable broker, with brand trust and access to banking integration through CBA continuing to appeal to many retail investors. But CMC Invest has made strong gains by offering low-cost trading, international market access and competitive brokerage fees.

The analysis highlights that the “best” platform depends on the type of investor. Frequent traders may be able to save money with CMC’s lower pricing structure, while those who value research, tools and seamless integration with existing accounts may prefer CommSec. For retail investors considering a switch, the choice is less about one being better overall, and more about which platform best matches their strategy.

Take a look at the full analysis to better understand the differences between platforms.

New research on how Aussies would spend a surprise $10k

What would you do with a sudden significant cash windfall? New survey research from ING shows how Australians might utilise a bonus $10,000.

Over half of respondents (53%) would put the money away in savings, with that figure climbing to nearly three quarters (69%) of younger Australians aged 18-34, suggesting a strong focus on financial security. The survey also uncovered some unique splurge ideas, with a quarter (25%) of Aussies dreaming of a mystery travel package where the destination is a surprise.

The findings highlight a generational divide, with older Australians more focused on paying down debt and retirement, while younger Aussies are prioritising financial security and travel.

ING's Head of Consumer and Market Insights, Matt Bowen, noted that "it's interesting to see how Australians balance practicality of helping get ahead financially, with the ultimate indulgence or unexpected splurge." 

The data shows that while many are focused on financial wellbeing, a significant portion are also looking to use the money for experiences that bring joy.

The rise and risks of AI investing advice in Australia

AI is increasingly shaping how Australians invest, with tools that can analyse vast amounts of data, identify trends, and even suggest trades. These technologies promise faster insights and more streamlined decision-making, making them an appealing addition to the investment landscape.

But alongside the potential benefits, there are clear risks. Relying heavily on algorithms can leave investors exposed to unexpected market swings, and AI systems are only as good as the data they use. Poor-quality or biased data can lead to misleading recommendations and unexpected outcomes.

A lack of source transparency can also make it difficult to assess how or why a particular investment decision was suggested. Cybersecurity is another concern, as the growing use of AI in finance creates new targets for potential attacks.

Adding to the uncertainty is the fact that regulations around AI-driven investing are still evolving. The speed of technological advancement has outpaced current rules, creating potential gaps and ambiguities in how these tools are monitored and used. As a result, AI investing is emerging as a powerful but complex element of the Australian investment landscape.

Savers see real value of money shrink

Australians putting money in savings accounts need to be aware that what they earn in interest isn’t going far once inflation is taken into account. The average savings account rate on Mozo’s database is 3.09% p.a. (on a $10k balance at 12 September 2025), while inflation is currently at 2.80%, according to the Australian Bureau of Statistics (ABS) latest figures. 

This leaves savers on an average rate with a real return of just 0.29% per year.

The picture is especially bleak for people using “base” or unconditional rates. Among the Big Four banks, the average unconditional rate is only 0.65% p.a., which, when inflation is factored in, means a negative real return of roughly -2.15%. In effect, those balances are slowly losing purchasing power.

How different savings account types are performing on Mozo’s database

• Across all personal accounts (for a $10,000 balance), the average rate is 3.09% p.a., the median is 3.60% p.a., while the best rates are around 5.00% p.a..
• For the Big Four banks: ongoing bonus accounts average 2.57% p.a., while base and unconditional rates are particularly low, averaging 0.65% p.a..

What to do to get ahead

A few clear strategies stand out for savers looking to protect their money’s value:

• Compare account types. Bonus and introductory rates typically have conditions attached. Knowing the types of requirements you need to meet can make a big difference to where and how you might choose to stash your cash.
• Seek higher rates. The best ongoing bonus savings rates are currently returning 4.80% p.a., substantially better than the average. Choosing one of these accounts could provide meaningful gains over time.
• Avoid being stuck with low base rates. Don’t be complacent and accept poor value.

Leading ongoing bonus savings rates

Source: mozo.com.au as at 12 September 2025, leading ongoing savings account rates, excluding age restricted accounts, at a balance of $10,000.