HomeBuilder and first home buyers see home loan commitments hit record highs

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on January 15, 2021
HomeBuilder and first home buyers see home loan commitments hit record highs

Photo by Maximillian Conacher on Unsplash

The housing market continued its hot streak in November 2020, with home loan commitments hitting record highs.

Data from the Australian Bureau of Statistics (ABS) found the total value of new loan commitments for housing rose 5.6% in the month to $24 billion, seasonally adjusted, an impressive 23.7% increase on November 2019. 

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of January 18, 2022. View disclaimer.

The sharp increase in commitments was driven largely by first home buyers, with commitments from the group rising 3.1% in November to 13,905, seasonally adjusted, a 42.5% rise since the start of the year. 

This is also the highest level of first home buyers seen since October 2009, when similar rapid growth occured due to the temporary tripling of the First Home Owner Grant (FHOG) as part of the government response to the Global Financial Crisis. 

ABS head of Finance and Wealth Amanda Seneviratne said the strong increases were also driven by the HomeBuilder scheme and commitments to existing dwellings. 

“Loan commitments for existing dwellings rose 5.9% and were the largest contributor to the rise in November’s owner occupier housing loan commitments," Ms Seneviratne said.

“The value of construction loan commitments grew 5.6% in November, rising 75% since July. This follows the implementation in June of the Government’s HomeBuilder grant in response to COVID-19.

“Other federal and state government incentives and ongoing low interest rates also contributed to the continuing growth in new housing loan commitments.”

lendindnov201

Source: ABS

Housing Industry Australia (HIA) economist, Angela Lillicrap said she expected construction loan activity to continue its strong growth into 2021. 

“The number of construction loans to owner occupiers in the three months to November was 83.7% higher than the same time last year," Ms Lillicrap said.

“HIA New Home Sales data suggests that detached housing finance approvals will continue to be strong over the coming months.

"The extension of HomeBuilder at the end of November is not a factor in this month’s result but will see the strength in housing finance data extend into 2021."

Victoria saw owner occupier home loan commitments rise sharply, up almost 20% in November, sesonally adjusted, mostly due to increased commitments for vehicles. 

Commitments to vehicles also saw a strong increase in commitments for fixed term personal finance, up 13.2%. 

Investor housing commitment also saw a strong increase in November, up 6% to reach $5.6 billion. 

“Investors are returning to the market, with the value of lending to investors up by 3.7% for the three months to November 2020 compared to the same time last year. This was driven by loans for the purchase of existing dwellings," Ms Lillicrap said.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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