Lenders have been increasing their fixed rates since late last year in anticipation of a potential rate hike. As the likelihood of the latter becomes stronger, mortgage rates are bound to increase further and sub-2% rates would eventually become a thing of the past.

However, there are still lenders out in the market that still offer rates below 2%, however, most of them are variable rates and special offer rates. Here are some of them:



Advertised Rate

Comparison Rate

Smart Booster Home Loan – Discount Variable for 2 Years

1.85% p.a.

2.21% p.a.

Low Rate Home Loan P&I <60% LVR

1.89% p.a.

1.89% p.a.


Owner Occupier Accelerates - Celebrate < 60% LVR

1.89% p.a.

1.89% p.a.


Yard Home Loan Special Rate

1.99% p.a.

2.02% p.a.

Bank of Sydney

Expect More Home Loan P&I <70% LVR

1.94% p.a

1.96% p.a.

You can use Your Mortgage’s Compare Home Loans tool to see other offerings close to these ones.

Ultra-low rates likely to be gone mid-year

Borrowers might have to move faster to take advantage of the ultra-low rates that are currently in the market as these sub-2% mortgage rates could be gone by mid-year.

Wealthi co-founder Peter Esho said owner-occupiers face the biggest risk from the impending rate rises.

“The RBA has put a time frame on its next rate rise, saying ‘over coming months, important additional evidence will be available to the Board on both inflation and the evolution of labour costs’ — we interpret that to mean that rates will rise in the second half of this year, perhaps in June, July, or August,” he said.

Mr Esho said the market is bound to see the ultra-low interest rate setting change this year, but what this rise means to the overall market remains “ambiguous”.

Still, Mr Esho said the rate rises are usually followed by rising rents, which could be an offsetting factor for investors.

“We're already seeing large increases in metropolitan rental markets, but owner-occupiers will be worst hit, particularly in locations with strong wages growth potential like Western Sydney,” he said.

“Investors are being slightly more cautious, but they also understand that the cost of everything is going up and building a house or apartment will only become more expensive in the future, which will support prices to an extent.”

Photo by @priscilladupreez on Unsplash