The Senate Economics Legislation Committee noted a well-functioning credit market was essential for economic growth, and the current consumer credit laws may be over prescriptive. 

"The committee is concerned by evidence that the regulatory framework has resulted in consumers being unable to access credit in a timely manner to buy their first home or to obtain a grant under the HomeBuilder scheme," it said in the report. 

"The committee is also concerned by the invasive and onerous nature of the inquiry and verification processes required under the existing responsible lending obligations."

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.
Principal & Interest
Featured Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
5.99% p.a.
5.90% p.a.
Principal & Interest
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.
Principal & Interest
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.

Responsible lending laws were introduced in 2009 by the Rudd Government in the wake of the Global Financial Crisis, and were recommended to be made permanent by the Hayne Royal Commission. 

Treasurer Josh Frydenberg announced plans to repeal the laws in September, speeding up the credit approval process and making it easier to get a loan.

However, the latest lending indicators data from the Australian Bureau of Statistics (ABS) showed new home lending in January was up almost 45% from the same time last year, while first home buyer numbers were up almost 71%. 

An open letter against the axing of the laws was penned by 125 organisations in November and the report noted these concerns and others, but held the view consumers would not be less safe without them. 

"The committee is of the view that these regulatory changes will not undermine consumer protections and that the principal of 'responsible lending' is deeply embedded in Australia's broader regulatory framework, which credit providers and credit assistance providers must still operate within and comply with." 

Labor and The Greens have opposed the changes and will vote against them, with the deciding votes coming down to the crossbench, who are likely to side with the government and pass the Bill into law. 

Consumer groups "gobsmacked" by report's findings 

Alycia Gawthorne, Campaigns & Advocacy Adviser for Consumer Action Law Centre, said the government's decision to push ahead with the Bill defied all logic. 

“In 2015 the Government initiated a review of predatory lending laws, which made some really sensible recommendations for reform to make sure people don’t fall into a debt trap. The Government accepted the majority of these recommendations and even released draft legislation," Ms Gawthorne said.

“It’s absolutely mind boggling that now – more than five years later – the same Government is introducing laws that fail to meet the basic level of protections recommended by its own review, while taking an axe to responsible lending protections for other types of credit.”

Ms Gawthorne said many people were still trying to get back on their feet after experiencing financial hardship as a result of the pandemic. 

“With crucial income support measures due to wind up at the end of the month, the Government’s Bill will see people sent straight into the clutches of predatory lenders.

“We’re counting on the crossbench senators to take a stand and vote against this Bill, which if passed, will have devastating impacts for our community and economy.”

Bill aimed at enabling Australians access to credit 

Liberal MP Tim Wilson said empowerment through homeownership was critical to Australia's economic landscape and would not lead to the "ridiculous circumstances" forecast by Labor and others. 

"The macroprudential framework that has been put in place by the regulators would ensure that lending was appropriate," Mr Wilson said.

"What we wouldn't have is needless paperwork and needless delay to 'yes'. We wouldn't have needless situations where young Australians who want to buy their first home miss out because the law gets in their way.

"What we want to do is make sure that the law not only protects consumers but also empowers them." 

Shadow Treasurer Dr Jim Chalmers said the government was using the recession and pandemic to unwind important consumer protections in the financial system. 

"It's like they weren't paying attention to the Hayne royal commission and the rorts and rip-offs that it uncovered," Dr Chalmers said.

"Those opposite get given a big report about all the rorts and rip-offs in the banking system, and their first inclination is: 'How can we unwind these protections, which the royal commission advised in its first recommendation that we should keep?

"That is ridiculous. It really is next level to use this pandemic as an excuse to go after consumers." 

See also: Using super for house deposits would worsen affordability, super group says

Image source: Twitter

Ready, Set, Buy!

Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

By subscribing you agree to our privacy policy