Speculation of an upcoming rate hike comes on the heels of the Reserve Bank of Australia's (RBA) June meeting, where the board discussed lifting the cash rate, as revealed in the meeting's minutes released this week.

Ultimately, the decision was to hold the rate steady.

The RBA's most recent meeting pre-dated the upside surprise that was the May inflation data and this week's retail trade figures, which showed consumers spent more than expected in May amid early end of financial year sales.

All this has economists on alert, with some beginning to discuss the possibility of an August rate hike.

There was good news for homeowners, however, as it was revealed Australia's median property price soared $59,000 over the financial year just been.

At the same time, two home loan lenders made variable mortgage rate cuts in the week just been, with BOQ's Me Bank and Bank Australia sweetening their offers for first home buyers and those with smaller deposits.

Let's dive into the latest market movements.

ME Bank slashes variable rates by up to 93 basis points

Bank of Queensland-owned ME Bank has reduced several of its variable rate offerings by nearly a full percentage point.

Borrowers with smaller deposits and less equity stand to benefit the most:

  • The Basic Home Loan rate dropped by 85 basis points to 6.39% p.a. (6.42% p.a. comparison rate*) for owner-occupiers with loan-to-value ratios (LVRs) of between 80% and 90%
  • The Flexible Home Loan Member Package rate was cut by 93 basis points to 6.49% p.a. (6.87% p.a. comparison rate*) for LVRs between 80% and 90%

The package offers borrowers an offset account and the option to fix their interest rate.

ME Bank also hiked many of its fixed home loan interest rates by up to 20 basis points this week. 

Bank Australia rolls out deal for first home buyers

In another win for buyers just starting out with a modest deposit, Bank Australia has put forward an offer for first home buyers.

The mutual bank's Basic Home Loan now advertises a 6.09% p.a. interest rate (6.14% p.a. comparison rate*) for first home buyers with LVRs of as high as 90%.

It will also waive the $595 establishment fee otherwise charged.

The deal is on offer for those applying on or after 4 July 2024 who have loans funded before 31 December 2024.

Hume Bank hikes variable rates by up to 25 basis points

But alongside the variable rate drops, there were also hikes.

Customer-owned Hume Bank lifted many of its variable rates by as much as 25 basis points for both owner-occupiers and investors this week.

Changes for owner-occupiers making principal and interest repayments included:

Product

LVR

Change

New rate (p.a.)

Comparison rate* (p.a.)

liteBlue

≤60%

20bp

6.14%

6.15%

liteBlue

60-80%

25bp

6.24%

6.25%

liteBlue

80-90%

20bp

6.49%

6.50%

liteBlue

90-95%

10bp

6.99%

7.00%

While investors making principal and interest repayments might find these changes interesting:

Product

LVR

Change

New rate (p.a.)

Comparison rate* (p.a.)

liteBlue Investment

≤60%

15bp

6.29%

6.30%

liteBlue Investment

60-80%

15bp

6.39%

6.40%

liteBlue Investment

80-90%

15bp

6.79%

6.80%

Other home loan rate movements

And that wasn't all that happened in the home loan market this week.

Here are some other changes that occurred:

  • Beyond Bank dropped fixed rates by up to 0.35%
  • Bank of China hiked various variable and fixed rates by 0.20%
  • Police Credit Union made changes to its fixed rates, with shifts of up to 0.20%

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Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
90%
Featured 4.5 STAR CUSTOMER RATINGS
  • Low rates for purchase and refinancing
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  • No fees, unlimited redraws, 0.10% offset 
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.39% p.a.
$2,434
Principal & Interest
Variable
$248
$350
70%
6.14% p.a.
6.19% p.a.
$2,434
Principal & Interest
Variable
$0
$595
70%
6.14% p.a.
6.17% p.a.
$2,434
Principal & Interest
Variable
$0
$799
80%
6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .

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