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

Australia’s cash rate has shot upward over 2022, rising from a record low 0.10 per cent to 2.35 per cent in just five months. Home loan interest rates have risen as mortgage lenders pass on these cash rate increases, though there are still some low-rate home loans available for borrowers.

Which lenders are offering the lowest interest rates? 

After one 25-point rate hike and four, consecutive 50-point hikes, home loan interest rates under 4 per cent are now some of the lowest that a borrower can realistically hope to find.

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

• Unloan
• Woolworths Team Bank
• Gateway Bank
• P&N Bank
• Yellow Brick Road

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. 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.

Keep in mind that more lenders will pass on the RBA cash rate hikes to customers as time goes on, making low-rate home loans harder to come by. Additionally, 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.

How much more rate pain can borrowers expect? 

The RBA’s cash rate hikes are putting pressure on the budgets of many Australian households, thanks to rising variable mortgage rates pushing up the cost of interest repayments. But according to the RBA governor, the “scourge” of high inflation could make life even more difficult, necessitating the higher rates.

There is a chance that at upcoming meetings, the RBA board could choose to slow the pace of hiking the cash rate, before pausing to assess their impact on inflation and the Australian economy. Economists from the big four banks are forecasting that the RBA may halt its rate rises by the end of 2022, or in early 2023.

Compare home loans in Australia