Borrowers dump big banks as rates rise

The Reserve Bank’s back-to-back rate hikes in May and June have galvanised Australia’s home borrowers into action, with thousands flocking to comparison sites in recent weeks to hunt out bargain home loan deals.

Interest in cheaper home loans is soaring, putting the big banks under pressure to keep their customers. New data from online property exchange PEXA reveals that refinancing is booming, and borrowers are choosing rival lenders over the big banks.

Although the average variable home loan rate has now hit 3.23%, fierce competition from online and challenger lenders means that rates are still available well below the 3.00% mark.

Mozo Money Expert Tom Godfrey said, “Savvy borrowers could save tens of thousands on their home loan by taking the opportunity to shop around and switch. Given the savings on offer, it's hardly surprising we're seeing a shift to challenger lenders away from the big four banks.”

Start by comparing some of this month's top rates on the market below….

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TOP HOME LOAN OFFERS JULY 2022

loans.com.au - Smart Booster Home Loan
  • 2.60% discount variable rate for 2 years (2.96% comparison rate*)
  • Free redraws and extra repayments
  • Optional offset account for 0.10%

The details:
Looking for a loan that's easy on your wallet? Look no further than the Smart Booster Home Loan from popular online lender loans.com.au. This low rate, low fee mortgage is packed with handy features like free extra repayments, unlimited free redraw, an optional offset account and a split rate option. With all this value on offer and no pesky ongoing fees to boot, it's no surprise the Smart Booster is a multi-year Mozo Experts Choice Award winner.^ Minimum 20% deposit.

UBank - Neat Home Loan
  • Variable rates from just 2.64% (2.65% comparison rate*) - min 40% deposit
  • Free extra repayments and redraw facility
  • Fast and paperless online application process

The details:
UBank ticks all the boxes with this low rate, low fee digital home loan for borrowers looking to keep their costs to a minimum. The Neat Home Loan rewards borrowers with lower loan-to-value-ratios (LVRs) with its most competitive rates, while also being light on fees. There's a $250 settlement fee but no application fees or ongoing fees. Features include free extra repayments and redraw, and repayments can be made weekly, fortnightly or monthly.

Unloan - Variable Home Loan
  • 2.64% variable rate (2.56% comparison rate*)
  • Zero upfront or ongoing fees
  • Refinancers only

The details:
Unloan is a stellar new digital home loan built by CommBank, offering owner-occupiers a low 2.64% variable rate (2.56% comparison rate*) along with a loyalty discount that shaves 1 basis point off your interest every year for up to 30 years. Loan features include free extra repayments and redraw, and there are no pesky fees to pay. Available for refinance loans of up to $3M. Minimum 80% LVR.

OneTwo - Variable Rate Home Loan
  • 2.59% variable rate (2.49% p.a. comparison rate*)
  • Zero fees + score discounts as you pay off your loan
  • $5,000 refinance cashback for loans over $500K (t&cs apply)

The details:
New digital lender, OneTwo Home Loans, took out a Mozo Experts Choice Low Cost Home Loan Award 2022^ for this innovative variable loan that combines a low rate and zero fees with features that reward you for paying down your loan. Each time you pay off 5% of your original loan, OneTwo will drop your rate by 0.03% (discount capped at 0.15%). On top of this, OneTwo will match any extra repayments made in the first 6 months (up to $2,500).  Available to refinancers in metro and inner regional NSW, Victoria and SA. 80% LVR.

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Want to compare more home loans? View the latest mortgage rates from over 80 lenders at Mozo's home loan comparison hub.

* 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

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