Banks, customer-owned institutions adjust home loan rates

Member-owned Unity Bank has joined a handful of lenders offering variable rate home loans within the 5.00% p.a. space for first home buyers.  

Variable rate mortgages have been moving in two directions since the year started and rate cut calls have become louder. 

In March, for instance, the InfoChoice database revealed a mixed trend in variable rate changes reflecting a generally upward trend, albeit a pretty modest one. 

The average interest-only owner-occupied home loans on our database lifted 7 basis points to bring the average to 6.72% p.a.; in the OO principal and interest category, the average rate was 6.68% p.a.

Meanwhile, this year has seen a downward trend in fixed-rate mortgages, aligning with expectations driven by indicators that suggest the interest rate has peaked. 

Last month saw a substantial 20 to 52 basis points decline across all terms, particularly those locked in for four to five years in the OO IO category.

Home loans in the five-year OO PI category averaged 5.95% p.a.

Mortgages until recently have been hovering around the low-to-mid 6% mark since the RBA increased the cash rate to 4.35% in November.

RBA data, at the end of January, had the new variable owner occupier rate at 6.27% p.a. 

As rates decline, borrowers burdened by high interest payments find relief just as aspiring homeowners find their footing in the housing market. 

Going back to the lenders that adjusted rates, here are the few we saw this week with a highlight on mortgages that have edged below the 6% threshold. 

Unity Bank offers first home buyers a deal

The Sydney-based mutual bank kicked off the second quarter of the year with a 25 basis point cut across its variable rate mortgages offered to new customers buying their first homes. 

Unity Bank’s 5.99% p.a. interest rate applies to First Home Buyer Advantage Plus loans paying P&I (5.99% p.a. comparison rate*) and IO (6.76% p.a. comparison rate*) with below 60% to 95% loan-to-value ratio (LVR). 

The newly priced rate is among the lowest variable first home buyer loans in the market; G&C Mutual Bank's offering is 5.90% p.a.

As an added treat to customers, new sign-ups will also get waived establishment, valuation, settlement, and legal fees, as well as a mortgage-linked offset account.

Unity Bank first rolled out the 5.99% p.a. interest rate for First Home Buyer Advantage Plus on a three-year fixed term (6.95% p.a. comparison rate*).  

BOQ boosts fixed home loans while ME moves rates down

After joining its peers in dropping the rates on fixed term mortgages a month ago, Bank of Queensland (BoQ) decided this week to apply a 10 basis points increase to its residential home loans locked in for two to five years.  

These new rates are available for loans with a maximum LVR of 95%.

• 2 Years: 6.24% p.a. (6.48% p.a. comparison rate*)
• 3 Years: 6.24% p.a. (6.47% p.a. comparison rate*)
• 4 Years: 6.34% p.a. (6.49% p.a. comparison rate*)
• 5 Years: 6.44% p.a. (6.53% p.a. comparison rate*)

The same 10-bps boost was also applied to BOQ’s fixed mortgages with discounted rates and a maximum LVR of 90%

• 2 Years: 5.89% p.a. (6.41% p.a. comparison rate*)
• 3 Years: 5.89% p.a. (6.37% p.a. comparison rate*)
• 4 Years: 5.99% p.a. (6.37% p.a. comparison rate*)
• 5 Years: 6.09% p.a. (6.38% p.a. comparison rate*)

Meanwhile, BOQ’s subsidiary ME Bank went in the other direction, slashing the rates on its Flexible Fixed (2-5 years) home loans paying principal and interest, topping at 60 basis points. 

AMP adjusts variable rates on package home loans

AMP tinkered around its Professional Package with a minimum loan amount of $1 million and up.

The bank boosted mortgages paying interest only and those that come with a line of credit, while simultaneously slashing the rates on those with principal and interest repayments. 

Here are the new rates effective this week.

Regional Australia Bank hikes home loan rates, cuts a few in between

Customer-owned Regional Australia Bank adjusted the rates on nearly 100 of its owner-occupier and investment home loan products, by up to 19 basis points - this came in the form of a rate hike.

This week’s movements mostly applied to the bank’s fixed rate mortgages – generally trending upwards, with tiny cuts squeezed in for home loans with below 60% LVR. 

Meanwhile, variable rate changes were applied to mortgages with offset accounts. 

Following this week’s adjustments, Regional Bank Australia’s lowest fixed rate for OO P&I is 5.66% p.a.; for investment loans, the lowest is 5.86% p.a.

Here are some of the lender’s newly priced mortgages for owner-occupiers:

While these are for investors:

Bank of China ups investment home loans

Bank of China added 10 basis points to its Discount Plus Investment Home Loans with principal and interest repayments.

• $100k-$1m: 6.48% p.a. (6.84% p.a. comparison rate*)
• $1m-$2m: 6.38% p.a. (6.75% p.a. comparison rate*)
• $2m and above: 6.28% p.a. (6.65% p.a. comparison rate*)

The discount investment home loan comes with a 100% full offset account.

GMCU shifts rates on fixed mortgages

Goulburn Murray Credit Union (GMCU) rolled out this week a 5.99% p.a. interest rate on one-year (7.64% p.a. comparison rate*) and two-year (7.48% p.a. comparison rate*) home loans after slashing their rates by 10 and 30 basis points, respectively. 

The customer-owned lender also equalised its fixed investment mortgages to 6.29% p.a. with a 20-basis point drop on the one-year term (8.31% p.a. comparison rate*) and a 10-basis point increase to the three-year term (7.91% p.a. comparison rate*).

Read more: Home Loans News Buying a home First Home Buyer Home loan rate changes

Bernadette Lunas

Finance Journalist

Bernadette is a journalist with years of experience covering topics in macroeconomics, real estate, and lifestyle beats for notable print media organisations. She joined the InfoChoice Group in 2024, bringing her passion for writing stories that help Australians make better decisions about money.

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