Get the Finder app 🥳

Track your credit score, free

Free

How a marginal 0.2% rate rise can cost the average Australian $16,800

Posted: 16 October 2015 10:21 am
News

Westpac’s call to lift its variable mortgage rate by 20 basis points will affect over 550,000 Australian households. While it’s unusual for lenders to announce rate hikes outside of the Reserve Bank’s cash rate cycle, speculation suggests that this may be trending.

Westpac-rate-increase-november

On Wednesday 14/10/15 Westpac announced that it would increase its variable mortgage interest rate for owner-occupier and residential investment property loans by 20 basis points effective November 2015, in response to APRA’s tightening capital requirements.

Westpac customers will be adversely (and directly) affected by the bank’s decision to lift variable home loan rates, and it appears that many Australian lenders will follow suit and potentially make unexpected rate changes outside of the Reserve Bank’s cycle.

While a 0.2% rate rise may seem insignificant, it’s estimated that Westpac’s decision to boost its variable rate home loan rates next month will affect over half a million Australian households- an estimated 552,000 in total.

For an average mortgage size of $371,200 with a variable rate of 5.45%, monthly repayments would be $2,102.98. With a 0.2% rate increase, however, monthly repayments would boost to $2,102.98 which means you’d need to budget an extra $46.77 per month. The difference over the average life of a 30-year loan would be a staggering $16,836.06.

Interestingly, according to the May finder.com.au RBA Monthly Survey, some economists predicted that the cash rate would start rising in the fourth quarter of this year- an outcome which seems feasible following Westpac’s decision yesterday.

ALSO READ: Learn more about refinancing your mortgage

ALSO READ: How to refinance your home loan

Read on to find out why Westpac made this decision and how you can prepare for future rate rises, and estimate the impact of rate changes on your mortgage repayments.

Rate changes outside Reserve Bank cycle

Our money expert, Michelle Hutchison, says that since May this year several lenders have initiated out of cycle home loan rate changes and that this could be a result of APRA’s capital requirements for lenders to boost the risk weight for home loans.

"In addition to Westpac’s announcement today that will see the bank lift its variable home loan rates by 0.20 percentage points effective from November 20, we’ve actually seen many out of cycle home loan rate changes after the last cash rate cut in May.

"According to the finder.com.au/home-loans database, 407 variable home loans have changed their rates out of cycle since June this year, 352 of which decreased”, she said.

Why did Westpac increase its variable home loan rate?

According to Michelle Hutchison, Westpac initiated this rate rise as a result of APRA’s intervention with regard to capital requirements for the risk weight on Australian home loans.

"With low funding costs and record high household deposits, it seems unusual for banks to be lifting variable rates out of cycle right now. However, Westpac could be preparing early for APRA's capital requirements of the average risk weight on Australian residential mortgage exposures to increase from 16% to at least 25% by July 2016.

"Total household bank deposits is at a record high of $737.3 billion, according to the latest APRA data analysed by finder.com.au. Westpac's household deposits is also sitting at its highest level, at almost $171 billion, as at August 2015”, she said.

Summary of Westpac changes

As at October 2015, Westpac has announced that the following changes will become effective for Westpac customers next month.

  • Owner occupier mortgage variable rates increased by 20 basis points to 5.68% per annum.
  • Residential investment property variable rates increased by 20 basis points to 5.95% per annum.
  • Westpac variable home loan customers that receive a Premier Advantage Package 0.7% per annum will move to 4.98% per annum for owner-occupiers and 5.25% for the residential investment property home loan.
  • No changes to fixed rate mortgages.

What does this mean for the rest of the industry?

With Westpac’s unexpected rate rise announcement, Michelle Hutchison says that further variable mortgage rate hikes could be on the horizon and that other lenders may imitate this move.

"The biggest concern is that Westpac's rate rise could open the floodgates for the other big banks and the rest of the home loan market to follow. So we're expecting to see more variable home loans rise in the coming months.

"Westpac holds 23% of the owner-occupied home loan market share out of all banks monitored by APRA, while the big four banks hold a combined 82%. They set the benchmark for the entire mortgage industry”, she said.

How will this impact me?

The average mortgage size in Australia is currently $371,200 so monthly repayments at 5.48% would be $2,102.98. With Westpac’s 0.2% variable rate increase, however, these monthly repayments will now be $2,149.74 which represents an additional monthly expense of $46.77 which is an extra $561.20 per annum.

The difference over the average life of a loan- 30 years- is a staggering $16,836.06.

Estimate how much a 0.2% variable rate rise could affect your mortgage repayments by using our monthly repayment calculator. Simply enter your details into the calculator and adjust the interest rate to account for future rate hikes to see how your repayments would change.

Alternatively, you can view the table below to see how a 0.2% rate increase would alter your mortgage repayments.

Extra cost per month for different home loan sizes

Home loan balanceCurrent monthly repayments at 5.10%Monthly repayments at 5.30%Difference
$200,000$1,085.90$1,110.61$24.71
$300,000$1,628.85$1,665.91$37.06
$400,000$2,171.80$2,221.22$49.42
$500,000$2,714.75$2,776.52$61.77
$600,000$3,257.70$3,331.83$74.13
$700,000$3,800.65$3,887.13$86.48
$800,000$4,343.60$4,442.44$98.84
$900,000$4,886.55$4,997.74$111.19
$1,000,000$5,429.50$5,553.05$123.55

Based on current average variable home loan rate of 5.1%

Thinking of refinancing your home loan?

You can compare a range of variable and fixed competitive home loans using the comparison table below.

ALSO READ: How much will it cost me to switch lenders?

Data indicated here is updated regularly
$
Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
2.64%
2.66%
$0
$0 p.a.
80%
Up to $4,000 refinance cashback.
A competitive variable rate loan from St.George. Refinancers borrowing $250,000 or more can get up $4,000 cashback for their first application (Other terms, conditions and exclusions apply).
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
2.29%
2.72%
$0
$8 monthly ($96 p.a.)
95%
Up to $3,000 refinance cashback.
A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.
UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate
2.49%
2.49%
$0
$0 p.a.
80%
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
Athena Celebrate Home Loan - 60% LVR  Owner Occupier, P&I
2.39%
2.39%
$0
$0 p.a.
60%
A very low variable rate for home buyers with 40% deposits or equity. This rate takes effect from 30 September for new and existing customers. You can get this rate if you apply today.
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR ≤ 80% (Owner Occupier, P&I)
2.68%
2.69%
$0
$0 p.a.
80%
$2,000 to $3,000 refinance cashback.
Get a competitive variable interest rate with no application fee or ongoing fees. Refinance to an eligible Suncorp loan and get a cashback of $2,000 or $3,000, depending on your loan amount. Other conditions apply.
ME Flexible Home Loan Fixed with Members Package - 2 Year Fixed Rate LVR ≤ 80% (Owner Occupier, P&I)
2.19%
3.36%
$0
$395 p.a.
80%
Lock in a competitive rate for owner occupiers for two years. Comes with a 100% offset account.
homeloans.com.au Low Rate Home Loan with Offset - LVR Under 60% (Owner Occupier, P&I)
2.44%
2.46%
$0
$0 p.a.
60%
A competitive rate with no application or ongoing fee. This loan is not available for construction.
HSBC Home Value Loan - Promotional Offer (Owner Occupier P&I)
2.59%
2.60%
$0
$0 p.a.
80%
Get a low interest rate loan with no ongoing fees. Plus you can make extra repayments and free redraw online.
Yard Variable Home Loan - LVR 80% Special (Owner Occupier, P&I)
2.39%
2.42%
$0
$0 p.a.
80%
A very low variable rate loan for home buyers with an optional offset account ($10 monthly fee). 20% deposit required.
Tic:Toc Live in 10% deposit Variable Rate - Principal & Interest
2.39%
2.40%
$0
$0 p.a.
90%
Get a very low interest rate and pay no application, settlement or valuation fees. Apply online for full approval in real time and add a 100% offset account for $10 a month.
Well Home Loans Balanced Variable - LVR 80% Special Offer (Owner occupier, P&I)
2.17%
2.20%
$250
$0 p.a.
80%
A very low interest rate for home buyers with 20% deposits saved. Add an offset account for a small fee. This special discount rate is available for new borrowers who apply and get approved by 30 November 2020. Not available for construction purposes.
Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I (*now 2.59%, drops to 2.54% on 30 Sep)
2.54%
2.46%
$0
$0 p.a.
80%
A competitive variable rate mortgage for owner occupiers $0 application and $0 ongoing fees. This interest rate falls over time as you pay off the loan. This rate will drop to 2.54% p.a on 30 September 2020 for new and existing customers. You can get this rate if you apply today.
IMB Budget Home Loan - Special LVR  ≤90% (Owner Occupier, P&I, NSW and ACT borrowers only)
2.78%
2.84%
$449
$0 p.a.
90%
NSW and ACT customers only. You can get an interest rate discount for a limited time with this competitive variable mortgage.
Virgin Money Reward Me Fixed Rate Home Loan - 2 Year $300k+ Special offer (Owner Occupier, P&I)
2.29%
2.87%
$300
$10 monthly ($120 p.a.)
80%
$2,500 refinance cashback
Buy your home and lock in a low rate for the first two years. Get a $2,500 cashback when you switch to Virgin Money with a loan amount of $300,000 or more with an LVR up to 80%. You must apply by 28 August and settle by 30 October 2020.
IMB Budget Home Loan - LVR ≤80% (Owner Occupier, P&I, NSW and ACT borrowers only)
2.61%
2.67%
$449
$0 p.a.
80%
A competitive variable rate for borrowers with 20% deposits saved. Available for NSW and ACT borrowers only.
Yard Variable Home Loan - LVR 90% (Owner Occupier, P&I)
2.65%
2.68%
$0
$0 p.a.
90%
A competitive variable rate for home buyers with 10% deposits saved. Optional offset account (with $10 monthly fee).
Athena Evaporate Home Loan - 60% to 70% LVR  Owner Occupier, P&I
2.49%
2.43%
$0
$0 p.a.
70%
A low variable rate for owner occupiers with 30% deposits. This rate takes effect from 30 September for new and existing customers. You can get this rate if you apply today.
AMP Bank Professional Package Variable Rate Home Loan - $100,000 and above, LVR ≤ 80% incl. LMI (Owner Occupier, P&I)
2.59%
3.00%
$0
$349 p.a.
80%
Get a sharp rate with no application or settlement fee, a redraw facility and 100% offset account. Other fees and charges apply.
ME Flexible Home Loan Fixed with Members Package - 3 Year Fixed Rate LVR ≤ 80% (Owner Occupier, P&I)
2.19%
3.30%
$0
$395 p.a.
80%
Get a low 3 year fixed rate with a 100% offset account and package discounts.
homeloans.com.au Low Rate Home Loan with Offset - LVR 60% to 80% (Owner Occupier, P&I)
2.54%
2.56%
$0
$0 p.a.
90%
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments. This loan is not available for construction.
ME Flexible Home Loan Fixed - 2 Year Fixed Rate LVR ≤ 80% (Owner Occupier, P&I)
2.34%
3.98%
$0
$0 p.a.
80%
Get a low fixed rate and pay no application or ongoing fees.
Bankwest Complete Home Loan Package Variable - $200k to <$750k LVR ≤80% (Owner Occupier, P&I)
2.73%
3.18%
$0
$395 p.a.
80%
A low variable rate loan with a 100% offset account and package discounts.
Heritage Bank Discount Variable Home Loan - LVR ≤ 80% (Owner Occupier, P&I) New Customers Only
2.78%
2.80%
$600
$0 p.a.
80%
Family guarantee option available. Enjoy flexible repayments and a low minimum loan amount.
HSBC Home Value Loan - Promotional Offer LVR 90% (Owner Occupier, P&I)
2.69%
2.70%
$0
$0 p.a.
90%
A competitive value home loan with no ongoing fee.
Heritage Bank Fixed Rate Home Loan - 2 Year Fixed Rate (Owner Occupier, P&I) New Customers Only
2.59%
4.26%
$600
$8 monthly ($96 p.a.)
95%
Get a partial offset account and the option to make interest-only repayments.
Bank of Melbourne Basic Home Loan - Special Offer (Owner Occupiers, P&I) LVR above 60% up to 80%
2.64%
2.66%
$0
$0 p.a.
80%
Up to $4,000 refinance cashback
A competitive variable rate loan from Bank of Melbourne. Refinancers borrowing $250,000 or more can get up $4,000 cashback for their first application (Other terms, conditions and exclusions apply).
Bluestone Prime Direct (Owner Occupier, P&I)
2.49%
2.51%
$0
$0 p.a.
70%
Bluestone's Prime Direct is a competitive variable rate home loan for borrowers with 30% deposits.
Newcastle Permanent Building Society  Premium Plus Package Fixed Rate - 2 Year Fixed (Owner Occupier, P&I)
2.44%
3.76%
$0
$395 p.a.
95%
$2,000 refinance cashback
Enjoy a discounted fixed rate and the ability to package the loan with other financial products. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
UBank UHomeLoan - 3 Year Fixed Rate (Owner Occupier, P&I)
2.14%
2.41%
$395
$0 p.a.
80%
A competitive fixed interest rate loan with no ongoing fees. Requires a 20% deposit.
BankSA Basic Home Loan - Owner Occupier, P&I
2.64%
2.66%
$0
$0 p.a.
80%
Up to $4,000 refinance cashback
A competitive variable rate loan from BankSA. Refinancers borrowing $200,000 or more can get up $4,000 cashback for their first application (Other terms, conditions and exclusions apply).
G&C Mutual Bank Momentum Home Loan - LVR <50% (Owner Occupier, P&I)
2.55%
2.57%
$0
$0 p.a.
A variable rate loan for owner-occupiers looking to refinance. This loan has low fees and a 100% offset account.
UBank UHomeLoan - 1 Year Fixed Rate (Owner Occupier, P&I)
2.14%
2.46%
$395
$0 p.a.
80%
Fix your mortgage for 1 year with a very competitive rate and no ongoing fees.
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier, P&I)
2.54%
3.98%
$595
$0 p.a.
95%
$2,000 refinance cashback
Borrow up to 95% LVR of the value of the property you're buying and pay no ongoing fees. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
Suncorp Home Package Plus Fixed - 2 Year Fixed Rate Special Offer $150k+ LVR ≤90% (Owner Occupier, P&I)
2.29%
3.28%
$0
$375 p.a.
90%
A low fixed rate loan available for borrowers with 10% deposits. Refinance to an eligible Suncorp loan and get a cashback of $2,000 or $3,000, depending on your loan amount. Other conditions apply.
UBank UHomeLoan - 1 Year Fixed Rate (Investor, P&I)
2.29%
2.84%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
IMB Fixed Rate Home Loan - 2 Year Fixed (LVR 90% Owner Occupier, P&I, NSW and ACT borrowers only)
2.39%
3.14%
$449
$6 monthly ($72 p.a.)
90%
NSW and ACT customers only. 2 years fixed interest terms and free access to redraw facility online. Available with a 5% deposit.
Athena Variable Home Loan - Owner Occupier, IO (*now 3.09%, drops to 3.04% on 30 Sep)
3.04%
2.68%
$0
$0 p.a.
80%
Owner occupiers can refinance to one of the most competitive interest-only rates in the market. No application fee and no ongoing fees. This rate will drop to 3.04% p.a on 30 September 2020 for new and existing customers. You can get this rate if you apply today.
ME Flexible Home Loan With Member Package - LVR ≤80% $400k up to $699,999 (Owner Occupier, P&I)
2.84%
3.29%
$0
$395 p.a.
80%
Unlock a range of savings with this competitive package home loan offer. Offset account and redraw facility included.
UBank UHomeLoan Variable Rate - Discount Offer for Investor Variable P&I Rate
2.89%
2.89%
$0
$0 p.a.
80%
Get a discounted, low-fee investor loan from a convenient online lender. 20% deposit required.
ME Basic Home Loan - LVR ≤80% $150,000 or more (Owner Occupier, P&I)
2.58%
2.60%
$0
$0 p.a.
80%
This variable rate loan keeps the features simple and fees low. This loan is offered by a 100% online lender.
Newcastle Permanent Building Society Real Deal Home Loan - Special Offer 1 (Owner Occupier, P&I)
2.59%
2.63%
$595
$0 p.a.
80%
$2,000 refinance cashback
$2,000 cashback for eligible refinancers borrowing $250,000 or more.
Heritage Bank Advantage Package - 1 Year Fixed (Owner Occupier, P&I) New Customers Only
2.59%
3.32%
$0
$350 p.a.
95%
Get a partial offset account and flexible repayments with this package loan.
UBank UHomeLoan - 1 Year Fixed Rate (Owner Occupier, IO)
2.29%
2.47%
$395
$0 p.a.
80%
A one year fixed rate offer with no ongoing bank fees.
IMB Fixed Rate Home Loan - 3 Year Fixed (LVR 90% Owner Occupier, P&I, NSW and ACT borrowers only)
2.39%
3.08%
$449
$6 monthly ($72 p.a.)
90%
NSW and ACT customers only. 3 years fixed interest terms and free access to redraw facility online. Available with a 10% deposit.
UBank UHomeLoan - 3 Year Fixed Rate (Owner Occupier, IO)
2.29%
2.44%
$395
$0 p.a.
80%
A competitive 3 year fixed rate with no ongoing bank fees.
Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer Discount 1 ($150k+ Owner Occupier, P&I)
2.94%
3.34%
$0
$395 p.a.
95%
$2,000 refinance cashback
New borrowers or refinancers can get a discounted rate with this package loan. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
IMB Fixed Rate Home Loan - 3 Years Fixed (LVR ≤90% Investor, P&I, NSW and ACT borrowers only)
2.64%
3.56%
$449
$6 monthly ($72 p.a.)
90%
NSW and ACT customers only. A 3 years fixed rate investor which allows extra repayments to be made.
UBank UHomeLoan - 1 Year Fixed Rate (Investor, IO)
2.44%
2.85%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
loading

Compare up to 4 providers

Data indicated here is updated regularly
$
Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
UBank UHomeLoan - 3 Year Fixed Rate (Owner Occupier, P&I)
2.14%
2.41%
$395
$0 p.a.
80%
A competitive fixed interest rate loan with no ongoing fees. Requires a 20% deposit.
HSBC Fixed Rate Home Loan - 2 Year Fixed Rate LVR 80% or below (Owner Occupier, P&I)
2.09%
2.98%
$0
$0 p.a.
80%
Lock in a competitive fixed rate for 2 years and buy your home with a 20% deposit.
Well Home Loans Balanced Fixed Home Loan - 2 Year (Owner occupier, P&I)
2.22%
2.21%
$250
$0 p.a.
90%
A low fixed mortgage with an optional 100% offset account. Not available for construction purposes.
Greater Bank Great Rate Home Loan - Discounted 1 Year Fixed with Family Pledge Home Loan - Up to 110% LVR (Owner Occupier)
1.99%
3.52%
$0
$0 p.a.
80%
Requires a family member to act as guarantor.
Get one of the lowest rates on the market with this fixed rate mortgage and borrow more with help from a family guarantor. NSW, QLD and ACT residents only.
Virgin Money Reward Me Fixed Rate Home Loan - 2 Year $300k+ Special offer (Owner Occupier, P&I)
2.29%
2.87%
$300
$10 monthly ($120 p.a.)
80%
$2,500 refinance cashback
Buy your home and lock in a low rate for the first two years. Get a $2,500 cashback when you switch to Virgin Money with a loan amount of $300,000 or more with an LVR up to 80%. You must apply by 28 August and settle by 30 October 2020.
ME Flexible Home Loan Fixed with Members Package - 2 Year Fixed Rate LVR ≤ 80% (Owner Occupier, P&I)
2.19%
3.36%
$0
$395 p.a.
80%
Lock in a competitive rate for owner occupiers for two years. Comes with a 100% offset account.
IMB Fixed Rate Home Loan - 3 Year Fixed (LVR 90% Owner Occupier, P&I, NSW and ACT borrowers only)
2.39%
3.08%
$449
$6 monthly ($72 p.a.)
90%
NSW and ACT customers only. 3 years fixed interest terms and free access to redraw facility online. Available with a 10% deposit.
Well Home Loans Balanced Fixed Home Loan - 2 Year (Investor, P&I)
2.39%
2.78%
$250
$0 p.a.
90%
A 2 year investor rate with principal and interest repayments. Optional offset account with a $10 monthly fee. Not available for construction purposes.
UBank UHomeLoan - 1 Year Fixed Rate (Investor, P&I)
2.29%
2.84%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
Tic:Toc Live in Loan Fixed Rate Home Loan - 2 Year (Owner Occupier, P&I)
2.09%
2.35%
$0
$0 p.a.
90%
Get a very low interest rate and pay no application, settlement or valuation fees. Apply online for full approval in real time and add a 100% offset account for $10 a month.
Suncorp Home Package Plus Fixed - 2 Year Fixed Rate Special Offer $150k+ LVR ≤90% (Owner Occupier, P&I)
2.29%
3.28%
$0
$375 p.a.
90%
A low fixed rate loan available for borrowers with 10% deposits. Refinance to an eligible Suncorp loan and get a cashback of $2,000 or $3,000, depending on your loan amount. Other conditions apply.
Well Home Loans Balanced Fixed Home Loan - 3 Year (Owner Occupier, P&I)
2.27%
2.23%
$250
$0 p.a.
90%
A low 3 year fixed rate for home buyers. Add a 100% offset account with a $10 monthly fee. Not available for construction purposes.
Heritage Bank Fixed Rate Home Loan - 2 Year Fixed Rate (Owner Occupier, P&I) New Customers Only
2.59%
4.26%
$600
$8 monthly ($96 p.a.)
95%
Get a partial offset account and the option to make interest-only repayments.
Newcastle Permanent Building Society  Premium Plus Package Fixed Rate - 1 Year Fixed (Owner Occupier, P&I)
2.39%
3.85%
$0
$395 p.a.
95%
$2,000 refinance cashback
Enjoy a competitive rate with no application fee for this package loan. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
ME Flexible Home Loan Fixed with Members Package - 3 Year Fixed Rate LVR ≤ 80% (Owner Occupier, P&I)
2.19%
3.30%
$0
$395 p.a.
80%
Get a low 3 year fixed rate with a 100% offset account and package discounts.
Well Home Loans Balanced Fixed Home Loan - 3 Year (Investor, P&I)
2.44%
2.76%
$250
$0 p.a.
90%
A competitive 3 year investor rate with principal and interest repayments. Optional offset account with a $10 monthly fee. Not available for construction purposes.
UBank UHomeLoan - 1 Year Fixed Rate (Owner Occupier, IO)
2.29%
2.47%
$395
$0 p.a.
80%
A one year fixed rate offer with no ongoing bank fees.
Newcastle Permanent Building Society Real Deal Home Loan - Special Offer 1 (Owner Occupier, P&I)
2.59%
2.63%
$595
$0 p.a.
80%
$2,000 refinance cashback
$2,000 cashback for eligible refinancers borrowing $250,000 or more.
Heritage Bank Advantage Package - 1 Year Fixed (Owner Occupier, P&I) New Customers Only
2.59%
3.32%
$0
$350 p.a.
95%
Get a partial offset account and flexible repayments with this package loan.
Newcastle Permanent Building Society  Premium Plus Package Fixed Rate - 3 Year Fixed (Owner Occupier, P&I)
2.49%
3.68%
$0
$395 p.a.
95%
$2,000 refinance cashback
A two year fixed rate home loan with no application fees. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
UBank UHomeLoan - 1 Year Fixed Rate (Owner Occupier, P&I)
2.14%
2.46%
$395
$0 p.a.
80%
Fix your mortgage for 1 year with a very competitive rate and no ongoing fees.
Virgin Money Reward Me Fixed Rate Home Loan - 3 Year $300k+ Special offer (Owner Occupier, P&I)
2.29%
2.83%
$300
$10 monthly ($120 p.a.)
80%
A competitive fixed rate mortgage available with a 10% deposit.
ME Flexible Home Loan Fixed with Members Package - 1 Year Fixed Rate LVR ≤ 80% (Owner Occupier, P&I)
2.19%
3.44%
$0
$395 p.a.
80%
Fix your rate for the first year and take advantage of package benefits. Comes with a 100% offset account.
Newcastle Permanent Building Society  Premium Plus Package Fixed Rate - 2 Year Fixed (Owner Occupier, P&I)
2.44%
3.76%
$0
$395 p.a.
95%
$2,000 refinance cashback
Enjoy a discounted fixed rate and the ability to package the loan with other financial products. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
ME Flexible Home Loan Fixed - 2 Year Fixed Rate (Investor, P&I)
2.94%
4.70%
$0
$0 p.a.
80%
Lock in a competitive rate for 2 years, unlock package discounts and use a 100% offset account to minimise interest payments.
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier, P&I)
2.54%
3.98%
$595
$0 p.a.
95%
$2,000 refinance cashback
Borrow up to 95% LVR of the value of the property you're buying and pay no ongoing fees. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
UBank UHomeLoan - 3 Year Fixed Rate (Investor, P&I)
2.29%
2.74%
$395
$0 p.a.
80%
Pay no ongoing fees on this investment loan fixed for 3 years.
Virgin Money Reward Me Fixed Rate Home Loan - 2 Year LVR < 90 (Owner Occupier, P&I)
2.84%
2.97%
$300
$10 monthly ($120 p.a.)
90%
Enjoy a competitive fixed rate with no application fee.
UBank UHomeLoan - 5 Year Fixed Rate (Owner Occupier, P&I)
2.59%
2.53%
$395
$0 p.a.
80%
A five year fixed rate offer with no ongoing bank fees.
loading

Compare up to 4 providers

How can I prepare for future variable mortgage rate rises?

As a savvy borrower, you can take the following precautionary steps to ensure that you’re prepared for a potential rate rise:

  • Research: Compare a range of home loan products from lenders and building societies to see what rates and promotions are on offer.
  • Consider refinancing: If you find a home loan that offers more competitive features or a more attractive rate, you may want to consider switching to another lender. Just ensure that you carefully weigh the costs of switching before initiating this kind of move.
  • Buffer of funds: As a contingency measure, it’s a good idea to ensure that you have a buffer of funds stored away, around 2-3% or an extra $400 of monthly repayments, to ensure that you can cope with any rate rise increases.
  • Speak to professionals: Speak to mortgage brokers and financial planners to ensure that you are sourcing the type of finance product that meets your borrowing needs as well as your personal budget. Try to project your cashflow and budget by accounting for potential rate hikes.

If you’re looking for peace of mind or greater certainty for your home loan repayments, you may want to consider fixing part or all of your home loan through a competitive fixed rate home loan, which you can compare in the table above.

To prepare for potential variable rate increases, Michelle Hutchison says that you should practice due diligence and conduct thorough research to ensure that you’re getting the most competitive deal.

“We’re clearly seeing banks respond to APRA’s crackdown, and expect to see further movement in the residential lending space so watch this space. For borrowers, it’s definitely the time to do your research when shopping around for a home loan to ensure you’re getting the best possible deal for your situation as competition looks set to get tighter”, she says.

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site