How a rate rise could affect you

Home Loan Comparison Table - rates updated daily

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    Mozo Experts Choice 2021
    Smart Booster Home Loan

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

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a.variable for 12 months and then 2.48% p.a. variable
    2.47% p.a.

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.

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    Details
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    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.75% p.a.
    fixed 3 years
    2.22% p.a.

    $0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

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    Details
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    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    2.09% p.a.
    fixed 3 years
    2.43% p.a.

    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

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    Details
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    Mozo Experts Choice 2021
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.19% p.a. variable
    2.19% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.

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    Fixed Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.89% p.a.
    fixed 2 years
    2.15% p.a.

    Award-winning low rate home loan that could save you thousands. No application or ongoing fees, fee-free redraws, unlimited additional repayments and an optional offset account for $10/month. Minimum 10% deposit. Winner of Mozo’s Experts Choice Award for Online Home Lender of the Year 2021.^

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    Details

So how much would a rate rise lift your monthly repayments and the interest you pay over the life of your loan by? Let’s do the maths using the a hypothetical variable interest rate of 4.00%.

Scenario 1 - $300,000 home loan over 25 years

Rate rise Interest rate Monthly repayments Interest paid over 25 years
Hypothetical variable interest rate 4.00% $1,584 $175,053
0.25% 4.25% $1,625 $187,564
0.50% 4.50% $1,667 $200,249
0.75% 4.75% $1,710 $213,106

Scenario 2 - $500,000 home loan over 25 years 

Rate rise Interest rate Monthly repayments Interest paid over 25 years
Hypothetical variable interest rate 4.00% $2,639 $291,755
0.25% 4.25% $2,709 $312,607
0.50% 4.50% $2,779 $333,749 
0.75% 4.75% $2,851 $355,176

Scenario 3 - $700,000 home loan over 25 years

Rate rise Interest rate Monthly repayments Interest paid over 25 years
Hypothetical variable interest rate 4.00% $3,695 $408,457
0.25% 4.25% $3,792 $437,650
0.50% 4.50% $3,891 $467,248
0.75% 4.75% $3,991 $497,246

The tables above are a quick way of seeing the huge difference a rate rise of 0.25%, 0.50% and 0.75% could make to your ongoing repayments and the interest you pay over the life of the loan.

Just take the $700,000 loan scenario for example. If you were signed up with a 4.00% rate loan and your interest rate climbed by 0.75% you would be out of pocket by an extra $296 each month.

If you want a more exact indication of how a rate change could affect you, punch in your digits into our Home Loan Rate Change Calculator.

Switching to a better home loan deal

There are two options available to you if you are worried your lender will lift its variables rates:

1. Hope for the best and if they do lift rates budget for higher repayments
2. Vote with your feet and refinance to a more competitive deal

Back to our $700,000 scenario, if you were thrifty and decided to choose the latter option of refinancing, and switched from a 4.00% interest rate to a deal like Click Loan’s The Online Home Loan* (Principal & Interest, Owner Occupier) with a 3.64% variable interest rate, you would save $138 a month and $41,314 in interest over the life of the loan.

Now also might be a good time to consider locking in your interest rate by switching to a home loan with a fixed interest rate, as your repayments would remain the same over the fixed period and you would be protected against any rate rises. But keep in mind, fixed rate loans generally don’t come with flexible features like an offset account.

To compare some of the top home loan offers available in the market, you can visit our home loan comparison hub here.

*Rates accurate as of May 10, 2018. 

*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 Loans Awards

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