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

As Australia’s banks and mortgage lenders gradually pass the latest cash rate hike from the Reserve Bank of Australia (RBA) on to their customers, a few lenders are still offering relatively low home loan rates or have even cut rates for new customers.

At its December 2022 meeting, the RBA board chose to increase the national cash rate by 25 basis points. This is the eight consecutive cash rate increase, raising the cash rate from the record low of 0.10 per cent in April 2022 to 3.10 per cent – the highest cash rate in over a decade. 

Which lenders are offering the lowest rates?

While most mortgage lenders will eventually pass on the RBA’s cash rate rise, some of the lowest home loan interest rates on the RateCity database at the time of writing can be found from:

• The Mutual
• Summerland Home Loan
• G&C Mutual Bank
• GMCU
• Bank First

You can keep track of which mortgage lenders have announced that they are raising their interest rates for home loans and savings accounts with RateCity’s RBA Rate Tracker.

Who can apply for a low-rate home loan?

Not every low-rate home loan will be an ideal choice for every borrower. To qualify for some of the lowest home loan rates, you may also need to fulfil specific eligibility criteria, such as having a low Loan to Value Ratio (LVR). This may mean having to refinance a loan for an existing property or apply for a loan with the help of a guarantor.

It’s important to remember that there’s more to a home loan than just its interest rate. Sometimes the fees, features and benefits can affect a home loan’s value to you and your household’s financial situation.

How many more rate hikes are coming in 2023? 

Eight months of rate hikes have affected Australian finances in several different ways. According to the Australian Bureau of Statistics (ABS), in October 2022 falls were recorded in the value of new approved home loans, the number of first home buyers, and the value of refinanced loans. Australian borrowers were also found to be moving away from fixed rate mortgages in favour of variable rates. Household spending was also found to have eased, while credit card debt has increased as rising rates and the cost of living puts pressure on household budgets. 

With the RBA forecasting that inflation will reach 8 per cent by the end of 2022, the cash rate may rise further in 2023 to help tackle inflation. Three out of Australia’s big four banks are predicting that rates will keep rising until March or May 2023, before pausing for a time. Depending on how quickly inflation declines, rate cuts could even be possible by late 2023 or 2024.

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