Latest Interest Rate Update

Staying Informed with the Latest Interest Rate Update in Australia

As of November 2024, the Reserve Bank of Australia (RBA) has held the cash rate steady at 4.35%, a key factor influencing home loan interest rates, which directly impact the cost of your mortgage.

 

At Ausfirst Lending Group, we’re here to guide you through the implications of the interest rate update in Australia on your mortgage strategy. This page provides a comprehensive look into what the cash rate is, how the RBA sets it, and how it affects home loan rates. You’ll also find insights on average mortgage rates, tips for navigating the loan market, and an overview of lenders offering home loans, equipping you with the information you need to make well-informed financial decisions.

What Is the Cash Rate, and How Does It Affect Home Loan Interest Rates?

The cash rate, determined by the RBA, is the interest rate banks impose on each other for short-term “overnight loans” – quick loans that allow banks to balance their daily cash needs. This rate influences various interest rates across the economy, including mortgages, personal loans, savings accounts, and term deposits. By adjusting the cash rate, the RBA aims to manage inflation, employment, and overall economic stability. When inflation is high, for instance, the RBA may increase the cash rate to curb spending; when economic growth is needed, it may reduce the rate to encourage borrowing.

Home loan interest rates typically follow the cash rate’s direction, affecting how affordable your mortgage can be. When the cash rate is low, lenders often reduce their rates, making your monthly repayments more manageable and appealing, whether you’re an existing homeowner or a first home buyer. However, when the cash rate rises, mortgage rates typically follow suit, which can lead to higher monthly costs. Even a small shift in the cash rate can significantly impact long-term loan costs, so staying informed on these updates helps you make better mortgage decisions.

What Are the Current Mortgage Interest Rates?

While the RBA’s cash rate serves as a benchmark for lenders when setting home loan rates, actual mortgage rates will vary depending on whether the loan is fixed or variable, what your loan term is, and what your loan-to-value ratio (LVR) is.

Variable Rates

Variable home loan rates are often close to the cash rate and can fluctuate based on RBA decisions. Currently, variable interest rates for owner-occupier loans paying principal and interest average around 6.67%, although this can differ between lenders and borrower profiles. A variable rate gives you flexibility, but keep in mind that your repayments can increase if the cash rate rises.

Fixed Rates

Fixed interest rate mortgages in Australia vary depending on the fixed term, which can range from one to five years. While short-term fixed rates (like one-year terms) tend to be lower, longer-term fixed rates provide stability and predictability in monthly repayments, which can be advantageous if you want to avoid rate fluctuations.

Rate Differences for Investors and Owner-Occupiers

Investors may find higher average rates than owner-occupiers, given the added risk lenders associate with investment properties. Both types of borrowers, however, can compare fixed and variable options to find competitive rates.

Which Lenders Offer Home Loans in Australia?

Below is a list of several lenders in Australia that offer home loans, along with links to their interest rate update today. These lenders range from traditional banks and credit unions to non-bank financial institutions, offering various loan products to suit different needs and preferences.

The Big Four Banks

These banks dominate the home lending market in Australia, offering extensive loan options, competitive interest rates, and comprehensive banking services.

Other Major Banks

These banks are well-established in Australia – offering a range of financial products, including home loans – but aren’t part of the Big Four.
  • AMP Bank – Provides home loans with a focus on competitive interest rates and flexible features.
  • Bank of Queensland (BOQ) – Known for personalised banking and flexible home loan options.
  • BankSA – A subsidiary of Westpac, focusing on home loans for South Australian residents.
  • Bankwest – A part of Commonwealth Bank, offering various home loan products, primarily in Western Australia.
  • Bendigo and Adelaide Bank – With a strong community focus, offering competitive home loan options.
  • Hongkong and Shanghai Banking Corporation (HSBC) – Internationally renowned, providing home loans focusing on competitive rates.
  • Internationale Nederlanden Groep (ING) – Known for online banking and home loans with straightforward applications.
  • Macquarie Bank – Provides a range of mortgage options and is known for flexible terms and investment loans.
  • St.George Bank – Another subsidiary of Westpac, providing home loans with various features.
  • Suncorp Bank – Offers extensive banking services with home loan products, primarily in Queensland.
  • Virgin Money – Digital-focused, providing various home loan options.

Customer-Owned Banks or Mutual Banks (Credit Unions)

These banks operate as customer-owned institutions, typically offering home loans with competitive rates and flexible terms, and often reinvesting profits to benefit their members.
  • Australian Mutual Bank – Offers home loans tailored to the needs of its members.
  • Auswide Bank – Provides a range of home loan products with a focus on community-oriented banking.
  • Bank Australia – Known for ethical banking, offering home loans with environmental and social considerations.
  • Beyond Bank – Serves members with various home loan options and an emphasis on community investment.
  • Border Bank – Focuses on home loans for border community residents and customs employees.
  • Community First Bank – Offers flexible home loans with a member-first approach.
  • Great Southern Bank – Australia’s largest customer-owned bank, providing diverse home loan options.
  • Heritage and People’s Choice – A recent merger, providing a range of home loan solutions.
  • Hume Bank – Focuses on personal banking and home loan products for regional Australians.
  • Newcastle Permanent – Offers home loans in Newcastle and surrounding communities.
  • Unity Bank – Provides a range of home loans, prioritising competitive rates and member benefits​.

Specialised Customer-Owned Banks (Serving Specific Professions or Communities)

These customer-owned banks offer tailored services, particularly home lending, for specific professions or communities.
  • Australian Military Bank – Specialises in financial products, including home loans, for Australian Defence Force personnel.
  • Defence Bank – Caters to defence personnel, offering home loans and specialised financial products.
  • Firefighters Mutual Bank – Provides home loans and financial services specifically for firefighters.
  • P&N Bank – Western Australia’s largest locally owned bank – originally founded for police and nurses – offering a range of home loans.
  • Police Credit Union – Tailors home loan products for law enforcement and emergency services personnel.
  • Teachers Mutual Bank – Offers home loans and financial products designed for educators, also covering other related sectors like healthcare and university staff.

Digital Banks

These are fully licensed banks offering a broad range of banking services, including loans, exclusively online.
  • Up Bank – Known for user-friendly apps, strong savings features, and various home loan options tailored for digital-first users.
  • ubank – Provides competitive home loans and savings accounts with a digital-first approach.
  • Unloan – A Commonwealth Bank-backed digital mortgage lender with annual rate discounts.

Online Lenders

These lenders focus solely on lending products, such as home and personal loans, using digital platforms for streamlined applications without offering full banking services.
  • Tiimely Home – Formerly known as Tic:Toc, focuses on fast-tracked online home loan applications.
  • loans.com.au – Provides home and personal loans through a digital-first platform.
  • homeloans.com.au – Known for competitive rates and an efficient online loan process.
  • Yard – Offers flexible home loan options.

Fintech Companies

These companies provide technology-driven financial services across a range of areas beyond just home lending.
  • Athena – Offers competitive home loans with a straightforward online application process.
  • Qantas Money – Offers financial products linked to Qantas points, including credit and lending products.
  • WLTH – Provides digital-first financial solutions across property, lending, and lifestyle.

Non-Bank Lenders

These lenders specialise in lending but do not hold a traditional banking licence, offering specialised loan products instead.
  • Pepper Money – Known for flexible lending solutions, particularly for borrowers with complex credit histories.
  • Firstmac – Offers home and investment loans at competitive rates.
  • Homestar Finance – Provides home loans with affordable rates and flexible terms.
  • La Trobe Financial – Offers specialised lending options, including home loans, for borrowers with unique financial needs.
  • RedZed – Focuses on lending to self-employed individuals and those with unique financial circumstances.
  • HomeStart – Offers home loans targeted at first-home buyers with affordability in mind.
  • Easy Street – Provides a range of competitive home loan products.
  • Well Money – Focuses on competitive home loans with quick online approval.

Optimising Your Mortgage Strategy Amid Interest Rate Changes with Ausfirst Lending

At Ausfirst Lending, we know that every interest rate update in Australia can impact your mortgage strategy and financial plans. Our team of mortgage brokers stays up-to-date with the latest changes in Australia’s rates, providing you with timely guidance to adjust your mortgage accordingly. 

With insights into options like refinancing your mortgage or choosing the right rate structure, we ensure you’re prepared for any market shifts, helping you maximise your mortgage’s potential while staying within budget. 

Let Ausfirst Lending support you in making confident, informed choices that safeguard your financial future.

Lenders' Interest Rates

Housing and Business Rates (September 2024)

Loan purpose Outstanding loans (% per annum) New loans (% per annum)
Housing (Table F6)
Owner-occupier 6.08 6.26
— Principal-and-interest 6.04 6.19
— Interest-only 7.00 6.97
Investment 6.44 6.49
— Principal-and-interest 6.38 6.41
— Interest-only 6.61 6.61
Business (Table F7)
Small business 7.42 7.25
Medium business 6.28 6.21
Large business 5.81 5.57

a) Includes loans at variable and fixed interest rates

Sources:

APRA; RBA

Latest News

ABC News: The Debate on Lending Restrictions and First Home Buyers

  • Ongoing parliamentary inquiry into lending rules and their impact on first home buyers in Australia.
  • Examination of the current 3% serviceability buffer and whether it is too stringent.
  • Concerns that strict lending rules may lock out young buyers but help maintain financial stability.
  • ANZ and NAB advocate for relaxing the rules to improve market access for first-time buyers.
  • APRA and financial counsellors caution that easing regulations could increase financial risk and mortgage stress.
  • Article explores the balance between lending policies, financial resilience, and housing affordability.
  • Final recommendations from the inquiry are expected soon and could signal major policy changes.
  • Discover the varied perspectives influencing Australia's property market debate.

The West: RBA Interest Rates Recap: November Board Meeting Highlights

  • RBA board continues to hold the official interest rate at 4.35% since November last year.
  • Chance of an immediate rate cut remains low, with most experts predicting the first reduction in February or potentially as late as May.
  • Headline inflation is back within the RBA's 2-3% target range, assisted by government energy bill rebates.
  • Underlying inflation, excluding volatile factors, still runs at 3.5% annually.
  • The labour market's ongoing strength supports the board's cautious stance against early rate cuts.
  • RBA Governor Michele Bullock emphasizes the need for inflation to be "sustainably" within the target range before considering rate reductions.
  • December's meeting is expected to follow the same pattern, holding rates steady and delaying any relief for mortgage holders.
  • For now, households with mortgages should brace for continued high rates until tangible signs of sustained inflation control appear.

Stay informed on how these economic decisions impact your financial landscape.

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Why Choose Ausfirst Lending Group

Dedicated Guidance and Comprehensive Service

At Ausfirst Lending Group, you are our top priority. We are dedicated to providing comprehensive assistance from start to finish, not just because we are legally obligated to act in your favour, but because we genuinely want to ensure your success. 

We focus on your objectives and requirements, and combine deep industry knowledge with a strong commitment to finding loan options that truly align with your financial needs. We simplify the entire loan application process by assessing your borrowing capacity, organising documentation, and negotiating terms on your behalf, all while securing the most favourable outcomes for you.

No-Cost Service with Transparency 

While some financial services may come with hidden fees, working with us ensures you won’t pay out of pocket for expert advice. Our service is free for you because we receive compensation directly from the lenders, allowing you to focus on finding the best loan without worrying about additional costs. We maintain transparency throughout the process, so you always know where you stand.

Extensive Lender Options

One of the key benefits of working with Ausfirst Lending is our access to a diverse range of lenders. Instead of presenting just one option, we assess a broad array of options to secure a loan tailored to your financial needs. This extensive selection allows us to tailor solutions that match your specific goals and circumstances, ensuring you get the best possible outcome.

Local Expertise with Added Benefits

Our knowledge of the property market in Brisbane is unparalleled, and we have been helping residents buy property for years. Our mortgage brokers in Brisbane aren’t just professionals; we’re local experts who understand the intricacies of the area’s property market. This local knowledge means we can provide insights and advice that are particularly relevant to your situation. Additionally, our connections in the industry may help you access special discounts or benefits, giving you an edge when securing a loan.

FAQs on Home Loan Interest Rates

A “good” interest rate depends on current market conditions and the type of home loan you’re considering, such as fixed or variable. Generally, a competitive rate is one that is lower than the national average, which tends to fluctuate with the Reserve Bank of Australia (RBA) cash rate. As of recent months, variable rates for owner-occupiers are around 6-7%, but individual rates may vary based on factors like your loan type, credit profile, and deposit amount. Comparing rates among lenders and understanding your financial goals can help you find a rate that works best for you.

Current mortgage interest rates in Australia vary by lender and are influenced by the RBA’s cash rate, which is 4.35% as of October 2024. Most variable interest rates for owner-occupiers sit between 6% and 7% due to recent cash rate changes, while fixed rates depend on the chosen term, often ranging slightly higher for longer fixed periods. To find the most accurate rate for your situation, check with your lender or review current rates on comparison sites, as they reflect real-time changes across the market.

The RBA cash rate serves as a guide for lenders when setting their home loan rates. A high cash rate often leads to higher mortgage interest rates, making repayments more costly. Conversely, when the cash rate is low, lenders typically lower their mortgage rates, making borrowing more affordable. However, lenders also consider factors like funding costs and competition, so the cash rate isn’t the sole factor affecting home loan interest rates.

Deciding between a fixed or variable rate depends on your financial situation and goals. A fixed rate locks in your interest rate for a set period, giving you predictable monthly payments, which can be beneficial if you expect rates to rise. A variable rate, however, fluctuates with the cash rate, potentially offering lower costs when rates are down but higher payments if they increase. Many borrowers opt for split loans to balance both options, with part of the loan fixed and part variable.

To secure a lower interest rate, you can consider refinancing your loan, especially if current rates are lower than what you initially signed up for. A larger deposit or better credit score can also help you qualify for a lower rate. Additionally, comparing rates across lenders, considering loan features like offset accounts, or opting for a shorter loan term can reduce the total interest you’ll pay over time.