National Australia Bank (NAB) was the first of the big banks to slash fixed rate mortgages in 2024, cutting in July and putting a '5' in front of advertised rates for some of its longer-term fixed loans.
On Tuesday, its digital offering ubank followed suit, dropping a swathe of its fixed owner-occupier and investor rates by up to 73 basis points.
Notably, it's also delivered further modest cuts to some of its variable rate home loans following earlier cuts in late July.
Ubank's new variable rates for owner-occupiers are as follows:
| Product | Change (%) | New rate | Comparison rate* |
| Flex Variable P&I <60% LVR | -0.05 | 6.09% p.a. | 6.33% p.a. |
| Flex Variable P&I 60-70% LVR | -0.05 | 6.14% p.a. | 6.38% p.a. |
| Flex Variable P&I 70-80% LVR | -0.05 | 6.14% p.a. | 6.38% p.a. |
| Flex Variable P&I 80-85% LVR | -0.1 | 6.64% p.a. | 6.88% p.a. |
| Flex Variable IO <60% LVR | -0.1 | 6.54% p.a. | 6.51% p.a. |
| Flex Variable IO 60-70% LVR | -0.05 | 6.64% p.a. | 6.58% p.a. |
| Flex Variable IO 70-80% LVR | -0.05 | 6.64% p.a. | 6.58% p.a. |
Fixed rates well down
Ubank has also dropped fixed rates across the board on its Flex Fixed principal and interest (P&I) and interest only (IO) loans.
The new rate advertised for owner-occupiers making P&I repayments with loan-to-value ratios (LVRs) of up to 80% and fixing their rate for two years is now 5.79% p.a. (6.28% p.a. comparison rate*).
Below are some of the new Flex Fixed rates for owner-occupiers paying P&I:
| Product, fixed rate period, LVR | Change (%) | New rate | Comparison rate* |
| Flex Fixed P&I 1 yr 60-70% | -0.4 | 5.99% p.a. | 6.37% p.a. |
| Flex Fixed P&I 1 yr 70-80% | -0.4 | 5.99% p.a. | 6.37% p.a. |
| Flex Fixed P&I 1 yr 80-85% | -0.73 | 6.25% p.a. | 6.83% p.a. |
| Flex Fixed P&I 2 yrs 60-70% | -0.3 | 5.79% p.a. | 6.31% p.a. |
| Flex Fixed P&I 2 yrs 70-80% | -0.3 | 5.79% p.a. | 6.31% p.a. |
| Flex Fixed P&I 2 yrs 80-85% | -0.55 | 6.29% p.a. | 6.81% p.a. |
| Flex Fixed P&I 3 yrs 60-70% | -0.2 | 5.79% p.a. | 6.28% p.a. |
| Flex Fixed P&I 3 yrs 70-80% | -0.2 | 5.79% p.a. | 6.28% p.a. |
| Flex Fixed P&I 3 yrs 80-85% | -0.55 | 6.29% p.a. | 6.77% p.a. |
| Flex Fixed P&I 5 yrs 60-70% | -0.4 | 5.79% p.a. | 6.23% p.a. |
| Flex Fixed P&I 5 yrs 70-80% | -0.4 | 5.79% p.a. | 6.23% p.a. |
| Flex Fixed P&I 5 yrs 80-85% | -0.69 | 6.29% p.a. | 6.72% p.a. |
Ubank's point of difference in the market is that it doesn't levy lenders mortgage insurance (LMI) on borrowers who have deposits of 15% or more.
However, the interest rates charged on 80-85% LVR loans are generally considerably higher than those offered to borrowers with a standard 20% deposit.
Coinciding with Tuesday's rates announcement, ubank released survey results showing 56% of young Australians (aged 18-43) hold the dream of home ownership within the next five years.
However, 95% of non-homeowners reported barriers to achieving it with high property prices (63%), difficulties in saving for a deposit (42%), and high interest rates (39%) the main obstacles.
Home loan rates heading lower
Over the past month on the mortgage market, many fixed and some variable home loan rates have been dropping markedly, with the big banks getting in on the act.
In August, Macquarie, Westpac, then CommBank followed NAB in making cuts to their fixed rates.
CommBank also dropped some of its owner-occupier variable home loan rates by 20 basis points and cut up to 35 basis points off some investment loan rates.
Commentators attribute the latest round of home loan rate drops to conditions on the global money market which are allowing Australian lenders to access money at lower wholesale rates.
Many are forecasting the mortgage market is poised for another round of 'mortgage wars' in the lead-up to the Reserve Bank of Australia's (RBA's) widely-expected cash rate drop.
Three of the big four banks believe the first cut will occur in early- to mid-2024, although CommBank is holding its line that the RBA will deliver a rate cut in November.
First home buyers going it alone
New data from Australia's biggest home lender CommBank has found a growing proportion of first home buyers are purchasing a property solo.
In the first six months of 2024, 40% of first homebuyers buying a home did so without a partner, friend, or family member alongside them.
That marks a notable jump from 35% of first home buyers in 2019.
CommBank data also found the proportion of its first home buyers accessing government guarantee schemes soared by 45% between FY21- FY24.
Indeed, nearly a third of those entering the market for the first time in 2022-23 turned to the Home Guarantee Scheme, figures from the body in charge of the scheme reveal.
Across Australia, the average first home buyer home loan written by CommBank in FY24 was $497,692.
First home buyers borrowing from the bank to purchase in metropolitan markets had an average loan size of $529,624 compared to $403,203 for those buying in regional Australia.
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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.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.69% p.a. | 6.16% p.a. | $2,319 | Principal & Interest | Fixed | $0 | $530 | 80% | Featured |
| Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,396 | Principal & Interest | Variable | $0 | $0 | 80% | Featured Apply in minutes |
| Disclosure | |||||||||
6.14% p.a. | 6.16% p.a. | $2,434 | Principal & Interest | Variable | $0 | $350 | 60% |
| Disclosure |
Image by Thom Holmes on Unsplash
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