Soon-to-be homebuyers may find their interest piqued this week as Australia shot the Albanese Government into a second term, and the party's housing policies with it, while lenders slashed rates.
Both major parties brought housing policies to the 2025 Federal Election.
The Coalition backed its Super for Housing scheme and proposed allowing select first home buyers to deduct mortgage interest.
Labor pledged to expand the Home Guarantee Scheme, build 100,000 homes for first home buyers, and reduce HECS-HELP debts by 20% - which, for some homebuyers, might impact borrowing power.
And with voting behind us, attention will likely turn towards the next Reserve Bank of Australia (RBA) meeting.
The central bank's monetary policy board will meet on 19 May, with its decision to be announced on 20 May.
With most bank economists now predicting a 25 basis point (bp) cut, and NAB out in front with predictions of a 50 bp cut, lenders might be adjusting their rates in anticipation.
So, with all that covered, let's dive into the latest home loan interest rate moves:
Bank of Queensland slashes rates to under 5% p.a.
Perhaps the most impactful rate move made this week came from the camp of Bank of Queensland (BoQ).
It slashed fixed rates to as low as 4.99% p.a. – joining Police Bank in advertising sub-5% rates on standard products.
That rate is now offered on the bank's discounted two and three year fixed rate periods for owner-occupiers, with this week's changes including:
|
Fixed period |
LVR |
Change |
New rate |
Comp rate* |
|---|---|---|---|---|
|
Two years |
<80% |
-55bp |
4.99% |
5.84% |
|
80-90% |
-55bp |
5.34% |
5.91% |
|
|
Three years |
<80% |
-55bp |
4.99% |
5.77% |
|
80-90% |
-55bp |
5.24% |
5.83% |
|
|
Four years |
<80% |
-55bp |
5.29% |
5.80% |
|
80-90% |
-55bp |
5.54% |
5.89% |
|
|
Five years |
<80% |
-55bp |
5.29% |
5.76% |
|
80-90% |
-55bp |
5.54% |
5.86% |
Most of these rates represent a discount on BoQ's standard fixed rates, available for a limited time to new-to-group borrowers taking out loans of at least $150,000.
BoQ-owned ME Bank also dropped fixed rates by up to 45bp this week, with new rates starting at 5.14% p.a.
Newcastle Permanent & co drop variable rates to as low as 5.74% p.a.
Meanwhile, merged mutual banks Newcastle Permanent and Greater Bank slashed variable rates by as much as 25bp this week.
Variable rates at both banks now start at 5.74% p.a. for those borrowing at least $150,000 with loan-to-value ratios (LVRs) of 80% or less.
That rate is a special offer on Newcastle Permanent's Real Deal home loan for owner-occupiers making principal and interest repayments (comparison rate* 5.78% p.a.).
Simultaneously, the discounted rate on Greater Bank's Great Rate Variable home loan was dropped to 5.74% p.a. for owner-occupiers making principal and interest repayments (comparison rate* 5.75% p.a.).
Both banks also currently have cashback offers on the table – up to $2,500 at Greater Bank and up to $3,000 at Newcastle Permanent – for eligible buyers and refinancers.
AMP launches 10-year interest-only home loan option
Finally, this week saw an Australian-first home loan option launch: A 10-year interest-only period for owner-occupiers and investors, without the need to requalify halfway through.
It's being offered by AMP Bank and is said to target retirees and pre-retirees who don't necessarily want to pay their outstanding mortgage balance off, rather funnelling extra funds into their lifestyle.
"In the past 20 years, the number of Australians aged 55 to 64 who own their homes outright has significantly decreased," AMP director of lending and everyday banking Michael Christofides said.
"Consequently, more people are carrying debt into retirement - a trend set to continue."
But the product won't be for everyone, with experts warning first home buyers and inexperienced investors to steer clear.
Other movers
- The Mutual Bank dropped fixed rates by up to 20bp
- Australian Unity increased rates on its Kick Starter Variable product by 10bp
- Heritage Bank and People's Choice (soon to become People First Bank following their 2023 merger) decreased fixed rates by up to 25bp
- The Capricornian lowered fixed rates by up to 70bp
- Queensland Country Bank dropped fixed rates by up to 10bp
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Lender Home Loan Interest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Extra Repayments Split Loan Option Tags Row Tags Features Link Compare Promoted Product Disclosure
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Image by Josh Withers on Unsplash
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