It had been all quiet on the home loan market over the silly season but this week, rate fixers must be back at work.

Let's check the first rate moves for January.

The Capricornian goes big

The folk at The Capricornian began the year with a splash, cutting the credit union’s No Frills variable home loan rate to 5.89% p.a. (5.94% p.a. comparison rate*) for owner occupiers paying principal and interest (P&I) – down 90 basis points.

Its No Frills investment loan has also had a 90-basis point haircut, down to 6.09% p.a. (6.14% comparison rate*).

No Frills Home Loan Rate change (%) New rate Comparison rate*
Owner occupier -0.90 5.89% p.a. 5.94% p.a.*
Investor -0.90 6.09% p.a. 6.14% p.a.*

The rates apply to borrowers paying P&I with up to 90% loan-to-value ratio (LVR), plus lenders mortgage insurance (LMI).

No Frills loans come with fee-free redraw but no offset account.

The Capricornian also made some bold cuts to its Premium Choice fixed term rates this week for owner occupiers and investors paying P&I.

The new owner occupier rates are as follows:

Fixed term Rate change (%) New rate Comparison rate*
2 years (<80% VLR) -0.15 5.59% p.a. 6.60% p.a.*
3 years (<80% LVR) -0.38 6.09% p.a. 6.64% p.a.*
1 year (>80% LVR) -0.25 5.74% p.a. 6.73% p.a.*
2 years (>80% LVR) -0.15 5.59% p.a. 6.60% p.a.*
3 years (>80% LVR) -0.58 6.09% p.a. 6.64% p.a.*

So, when will the cash rate fall?

If you believe the analysts, early 2025 could see Australia’s first drop in the official cash rate since March 2020.

The first Reserve Bank board meeting of the year will take place on 17-18 February with financial markets pricing in a 73% chance of a 25-basis point cut in the official cash rate from 4.35% to 4.10% at the meeting.

See also: Does the unemployment uptick support an RBA cash rate cut?

Whenever the cut occurs, it is expected to trigger a flurry of activity on both the mortgage and property markets with many prospective borrowers and homebuyers ready to jump when the cut comes.

See also: ANZ calls February cash rate cut

Australian Unity cuts early

Another small lender Australian Unity has also got in early, dropping the variable rates on its Kick Starter and the enticingly named Health Wealth Happiness loans.

The member-owned company’s basic Kickstarter discounted rate falls to 6.03% p.a. (6.03% p.a. comparison rate*) for owner occupiers with ≤70% LVR, down 15 basis points.

The rate rises to 6.08% p.a. (6.08% p.a. comparison rate*) for 70-80% LVR, also down 15 basis points.

The usual $600 loan establishment fee for a Kickstarter loan will also be waived, but for a limited time only. 

Meantime, the variable rates for Australian Unity's Health Wealth Happiness home loans and package home loans have also dropped.

The headline new package rate drops to 6.04% p.a. (6.39% p.a. comparison rate*) with an annual fee of $399 and a 100% offset account.

Here are the new discounted variable Health Wealth Happiness package rates for owner occupiers:

LVR Change (%) New rate Comparison rate*
≤70% LVR P&I -0.14 6.04% 6.39% p.a.*
70-80% LVR -0.15 6.09%  6.44% p.a.*

For those taking out Health Wealth Happiness home loans outside the package, the interest rates go up 10 basis points.

Take note: all rates mentioned above include a discount off the standard rates for new Kickstarter and Health Wealth and Happiness home and package loans.

While standard rates have also been cut, they are considerably higher.

G&C Mutual offers 5.5% fixed rate

Other movers this week are still trying to entice borrowers with fixed rates which may be a hard sell when the market’s gearing up for at least two cash rate cuts this year.

G&C Mutual has chopped 25 basis points off the rate for its Residential P&I fixed home loan to an eye-catching 5.5% p.a. (5.56% p.a. comparison rate*) for borrowers locking in for two years.

The loan allows extra repayments of up to 5% of the loan balance per year and a redraw facility.

But one thing to watch is that, at the end of the term, the loan will continue as a fixed rate loan for the same period with a new interest rate applying - unless a variable rate is requested by the borrower.

It’s highly uncommon for fixed rate loans to revert to another fixed rate at the end of the term.

The arrangement will put the onus on the borrower to ensure they make the necessary arrangements if they want to avoid another two-year fixed term.

As they say, it always pays to read the fine print.

Queensland Country Bank cuts fixed rates by 20 bp

The member-owned Queensland Country Bank has sliced 20 basis points across the board off its Fixed Rate and Fixed Rate Package home loan rates for owner occupiers and investors locking in for two or three years.

Its headline new rate is 5.89% p.a. (8.06% p.a. comparison rate* - two years and 7.86% p.a. comparison rate* - three years) for owner occupiers with <80% LVR paying P&I and fixing their loan for two or three years.

The rate goes up to 6.09% p.a. (8.11% p.a. comparison rate* - two years and 7.92% p.a. comparison rate* - three years) for those with >80% LVR.

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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.
6.08% 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
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

 

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