Who is still offering low-rate home loans after the November 2022 rate hike?

The latest hike to the national cash rate from the Reserve Bank of Australia (RBA) may continue to squeeze homeowners with higher interest repayments and restrict first home buyers by shrinking maximum borrowing amounts. Despite these rising rates, some mortgage lenders still have relatively low interest rates available for selected borrowers.

The RBA chose to increase the national cash rate by 25 basis points in November 2022. Combined with two more 25-point rises in October and May 2022, and four 50-point rate rises, the national cash rate has risen from its record low of 0.10 per cent to 2.85 per cent – the highest the cash rate has been since April 2013. 

Which lenders are offering the lowest rates?

While most mortgage lenders will eventually pass on the RBA’s cash rate rise, some of the lowest home loan interest rates on the RateCity database can be found from:

• GMCU
• Summerland
• Qudos Bank
• Hume Bank
• Fire Service Credit Union

You can keep track of which mortgage lenders have announced that they are raising their interest rates for home loans and savings accounts with RateCity’s RBA Rate Tracker.

Who can apply for a low-rate home loan?

Not every low-rate home loan will be an ideal choice for every borrower. To qualify for some of the lowest home loan rates, you may also need to fulfil specific eligibility criteria, such as having a low Loan to Value Ratio (LVR). This may mean having to refinance a loan for an existing property or apply for a loan with the help of a guarantor.

It’s important to remember that there’s more to a home loan than just its interest rate. Sometimes the fees, features and benefits can affect a home loan’s value to you and your household’s financial situation.

Do rate hikes mean a recession is coming?

With Australia’s inflation now expected to reach 8 per cent before the end of 2022, chances are good that interest rates will rise higher in the future to try and slow it down. RBA Governor, Dr Philip Lowe, recently said that allowing the “evil” of inflation to be with us for longer would require even higher interest rates further down the track, raising the risk of a severe recession and a sharp rise in unemployment.

“The Board’s base case remains that interest rates will need to go higher still to bring inflation back to target and our forecasts have been prepared on that basis. We are not on a pre-set path, though. If we need to step up to larger increases again to secure the return of inflation to target, we will do that.”

And while tough economic conditions around the globe may be raising the risk of global recession, Australian Treasurer, Jim Chalmers, said that the nation was in a strong position, stating that “It’s not our expectation that the Australian economy will go backwards.”

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