Who is still offering low-rate home loans after the October 2022 rate hike?

The Reserve Bank of Australia (RBA) is slowing down its hikes to the national cash rate, raising by just 25 basis points in October 2022. But with several of the major banks being quick to announce that they would pass this rise on in full to their home loan customers, it’s important to compare your options when looking for a low-rate home loan.

Which lenders are offering the lowest interest rates? 

After one 25-point rate hike back in May 2022, followed by four consecutive 50-point hikes, and the latest 25-point hike in October 2022, it’s becoming much harder to find a home loan interest rate under 4 per cent.

Some of the lowest home loans rates found on RateCity at the time of writing include offers from:

• Goldfields Money
• Beyond Bank
• Unloan
• Tic:Toc
• Police Credit Union

Keep in mind that it’s important to consider more than just the interest rate when you’re taking out a home loan, whether you’re applying for your first mortgage or refinancing. The fees, features and other benefits of a mortgage can make a big difference to the total value it offers.

Who can apply for a low-rate home loan? 

While first home buyers may be able to apply for some low-rate home loans, these mortgage deals often require a low Loan to Value Ratio (LVR), meaning it may be harder to qualify without a substantial deposit and/or help from a guarantor.

Some low-rate home loans are intended specifically for borrowers refinancing an existing mortgage, with lenders hoping that customers are prepared to jump ship in search of a better deal.

When will the RBA stop raising rates?

According to the RBA governor, the RBA Board will do “what is necessary” to tackle the “scourge” of high inflation, including raising the national cash rate. The RBA has indicated that further rate increases will likely be required to return inflation to the target band of 2 to 3 per cent.

According to the RBA:

"The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board’s assessment of the outlook for inflation and the labour market."

Economists are not yet certain whether these rate hikes will end with the 2022 calendar year, or continue into 2023. But once it is clear that the rate hikes are having an effect on Australia’s inflation, the RBA may choose to pause raising the cash rate for some time. After that, it’s possible that the RBA could even choose to cut the cash rate again by the end of 2023 or 2024.     

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