Australia’s jobless rate for January, released on Thursday, appeared to reaffirm a slowdown in the economy.

The official unemployment figure broke through the 4% barrier for the first time in two years, coming in at a seasonally adjusted 4.1%.

The Australian Bureau of Statistics pointed out the figure was likely affected by a January skew that’s impacted new year employment data for the past three years.

The data showed there was a higher-than-usual number of people who weren’t working but said they’d be starting or returning to a job in the future.

The big four banks' economists agreed the Reserve Bank of Australia would wait until the February jobs data to get a clearer picture of whether unemployment was rising faster than its expectations.

The RBA is forecasting unemployment will rise to 4.3% by the end of 2024; CBA expects it will hit 4.5%

Head of Australian economics at the Commonwealth Bank of Australia Gareth Aird said the loosening in the labour market has gathered momentum in line with very weak economic growth.

Australia’s biggest bank said the RBA will need to cut the cash rate this year to prevent the unemployment rate rising much above 4.5% - a more grim assessment than the RBA itself, which forecasts unemployment to hit 4.3% by year's end. 

With the scene set, let's check how lenders adjusted their home loans rates this week:

BOQ applies the slasher

Bank of Queensland, Australia’s sixth largest home lender, responded on Friday by cutting the rates on a wide range of its variable and fixed owner-occupier and investor home loans.

  • Its Investor Clear Path Variable Home Loan, paying principal and interest (P&I) with a loan-to-value (LVR) ratio of 95% saw the biggest cut of 1.03%, taking the rate to 7.84% p.a. (7.96% p.a. comparison rate*) for new borrowers.
  • Its Special Offer Clear Path Variable Home Loan, P&I, with 80-90% LVR also fell 25 basis points to 6.64% p.a. (6.76% p.a. comparison rate*) for new borrowers.
  • Meantime, the Special Offer rate for 95% LVR loans was cut by 50 basis points to 7.74% p.a. (7.86% p.a. comparison rate*).

The bank’s Clear Path loans feature no application fees, unlimited free redraw facility, a 100% mortgage offset account with flexible repayment options – weekly, fortnightly, or monthly.

BOQ fixed rates down

BOQ’s residential fixed-rate loans fell by 30 basis points across the board for two, four, and five-year fixed terms. Three-year terms were cut by 19 basis points.

Investment fixed rates also fell across the board by 20 basis points.

However, there was some upward movement, with BOQ’s Economy Variable P&I Special Offer loans for owner-occupiers climbing by nine basis points.

The new rates are 6.18% p.a. (6.33% p.a. comparison rate*) for LVR <70% and 6.23% p.a. (6.38% p.a. comparison rate*) for LVR 70-80%.

Bank of China chops fixed rates

The world’s 10th largest bank's Australian arm has cut its Fixed Rate P&I and Interest Only (IO) home loans by 50 basis points.

The new rates are as follows:

Loan product

Rate cut

New Rate

Comparison rate*

Fixed Rate Home Loan IO 1 year

50 basis points

6.19% p.a.

8.32% p.a.*

Fixed Rate Home Loan IO 2 year

50 basis points

6.19% p.a.

8.10% p.a.*

Fixed Rate Home Loan IO 3 year

50 basis points

6.19% p.a.

7.91% p.a.*

Fixed Rate Home Loan P&I 1 year

50 basis points

5.89% p.a.

8.29% p.a.*

Fixed Rate Home Loan P&I 2 year

50 basis points

5.89% p.a.

8.04% p.a.*

Fixed Rate Home Loan P&I 3 year

50 basis points

5.89% p.a.

7.82% p.a.*

Rates on other P&I home loans have also dropped between 10 and 20 basis points, while fixed rate investment loans paying P&I for one and two-year terms have been cut by 40 basis points.

Widespread cuts for Bank Australia

The customer-owned bank based in Victoria has cut a vast range of its owner-occupier and investment loans by up to 35 basis points this week.

The biggest falls were seen on its Premium Package Fixed one-year loans for LVRs between 60% to more than 90%.

One-year fixed rates are now 6.09% p.a. for LVR 60-80% (6.18% p.a. comparison rate* for LVR ≤60%; 6.21% p.a. comparison rate* for LVR 70-80%) and 6.29% p.a. for LVR >90% (6.43% p.a. comparison rate*).

Five-year fixed IO investment loans also fell 30 basis points to 6.74% p.a. (6.55% p.a. comparison rate* for LVR ≤60%; 6.58% p.a. comparison rate* for LVR ≤70%).

More fellers

Queensland Country Bank dropped its Special Variable Package P&I and IO home loans by 20 basis points for LVR <80% to 5.99% p.a. (6.34% p.a. comparison rate* for P&I; 6.33% p.a. comparison rate* for IO).

Its rates for LVR >80% P&I and IO Variable Package loans is now 6.19% p.a. (6.54% p.a. comparison rate* for P&I; 6.53% p.a. comparison rate* for IO).

The Mutual Bank cut its Investment Special Variable Rate for LVR 60-80% by 20 basis points to 6.09% p.a. (6.09% p.a. comparison rate*).

MyState Bank has also instituted more modest five to 10 basis point cuts across a range of its variable and fixed home loan interest rates.

Its Basic Variable P&I owner-occupier home loan with an LVR ≤60% is now 6.09% p.a. (6.12% p.a. comparison rate*).


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

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
70%
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5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
Featured Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
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 . View disclaimer.

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