It's been the first week for a little while to not bring much news on the home loan front.

Despite no change to the RBA cash rate since November last year, there have been some big shifts in the Australian mortgage market over the past few months.

Lower medium term bond yields allowed lenders to offer lower home loan rates, particularly for fixed terms.

As Warren Hogan told the Savings Tip Jar podcast in late August, Australia saw a significant drop in bond yields which allows lenders to fund loans at a lower price in the wholesale market.

"Three year government bond yields [are] the benchmark three year interest rate in the market...[they] fell pretty dramatically since the slightly weaker [Q2 inflation numbers]," he told the podcast.

"The three year yield was hovering over 4%, which is about the right level when your cash rate's at 4.35%, and then it collapsed and fell all the way down to 3.4%...and really held at 3.5, 3.6%."

The home loan rate cuts continued throughout the start of spring, but the tide has slowed recently, with the three year yield on Australian Government bonds back near 4% as of 24 October.

This might suggest that investors are starting to expect longer delays until rate cuts - which RBA boss Michele Bullock has said all along is the likeliest outcome.

As it stands, markets are pricing in the chances of yet another hold from the RBA on 5 November at 93%.

In any case, here were the home loan rate changes in the Australian market this week.

AMP altered variable rates up to 10 bps

Product Interest Rate Change
Investment Essential Home Loan ≤60%, $750k+ (LVR 0.01-60%) Down 10 bps to 6.39% p.a. (6.42% p.a. comparison rate*)
Investment Essential Home Loan 60-80%, $750k+ (LVR 60.01-80%) Down 5 bps to 6.44% p.a. (6.47% p.a. comparison rate*)
Investment Essential Home Loan 80-90% (LVR 80.01-90%) Up 10 bps to 6.59% p.a. (6.62% p.a. comparison rate*)
Professional Package Owner Occupied P&I ≤60%, $500k-$1m (LVR 0.01-60%) Up 5 bps to 6.24% p.a. (6.59% p.a. comparison rate*)
Professional Package Owner Occupied P&I 60-80%, $500k-$1m (LVR 60.01-80%) Up 5 bps to 6.24% p.a. (6.59% p.a. comparison rate*)
Professional Package Owner Occupied P&I 80-90% + LMI, $500k-$1m (LVR 80.01-90%) Up 5 bps to 6.44% p.a. (6.79% p.a. comparison rate*)
Professional Package Investment Variable P&I ≤60%, $500k-$1m (LVR 0.01-60%) Up 5 bps to 6.39% p.a. (6.74% p.a. comparison rate*)
Professional Package Investment Variable P&I 60-80%, $500k-$1m (LVR 60.01-80%) Up 5 bps to 6.44% p.a. (6.79% p.a. comparison rate*)
Professional Package Investment Variable P&I 80-90%, $500k-$1m (LVR 80.01-90%) Up 5 bps to 6.59% p.a. (6.94% p.a. comparison rate*)

The only sizeable bank to adjust home loan rates this week was AMP, with minor adjustments in either direction to variable rates.

AMP already cut fixed rates in September, but it's the first time for a while it has touched variable rates.

The rates on the Professional Package products, for both investors and owner occupiers, were bumped up 5 basis points, which while still pretty annoying for borrowers on these rates is unlikely to break the bank.

The Investment Essential Home Loan previously had a flat rate of 6.49% p.a. for all loan-to-value ratios (LVRs), with slightly different comparison rates, but this week's changes have differentiated between loan size.

Investors whose LVR is below 80% will benefit from a slight reduction in repayments, while if your loan is still above 80% you'll likely see your rate go up by 0.10%.

Other movers

  • The Capricornian cut fixed rates up to 83 bps
  • The Mac cut fixed rates for one and three year terms up to 0.40%.

Advertisement

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
Filters
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
6.04% p.a.
6.06% p.a.
$3,011
Principal & Interest
Variable
$0
$530
90%
4.6 Star Customer Ratings
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Quick and easy online application process.
Disclosure
5.99% p.a.
5.90% p.a.
$2,995
Principal & Interest
Variable
$0
$0
80%
Apply in minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
 Disclosure
6.09% p.a.
6.11% p.a.
$3,027
Principal & Interest
Variable
$0
$250
60%
  • No annual fees – None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
 Disclosure
5.69% p.a.
6.16% p.a.
$2,899
Principal & Interest
Fixed
$0
$530
90%
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Flexibility to split your loan with both fixed and variable rates
 Disclosure
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

Picture by Tienna Mallorca on Unsplash



Ready, Set, Buy!


Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

Download Free
By subscribing you agree to our privacy policy