The customer-owned bank is offering a competitive 5.64% p.a. (6.32% p.a. comparison rate) two-year fixed rate as a first home buyer special offer.
The rate lifted 11 basis points this week but is still among the market leaders offering a no fee deal, including valuation fees, and is available for loan-to-value ratios (LVR) between 80-95%.
The Australian Mutual Bank first home buyers' special also comes with a free redraw facility and a split rate option.
The new rate remains among the lowest fixed rates on the market for a two-year fixed period.
It's just five basis points higher than the leading lowest rate in InfoChoice's database - RACQ Bank's 5.59% p.a. (6.25% p.a. comparison rate) but that loan is fixed for five years, commands a 60% LVR, and is for Queensland residents only.
It's also much lower than the average two-year fixed advertised rate in InfoChoice's database recorded in June, which was 6.51% p.a.
AMB's special offer loan also comes with free financial planning assessment and assistance with applying for the First Home Owner Grant.
Fixed rates coming back in vogue?
Fixed rate loans have been shunned by borrowers in recent times, accounting for less than 2% of new home loans by value since the start of 2024.
That's when it was widely anticipated that interest rates would fall sometime this calendar year, and ostensibly many prospective home loan customers would have been looking to time the market with a variable rate.
But so far, the cash rate has remained on hold at 4.35%, and there is growing anticipation it could go higher still.
Head of retail at Tiimely Home (formerly Tic:Toc) Belinda Jackson said that the steadfast cash rate has renewed interest in fixed rate loans.
She told the Savings Tip Jar Podcast fixed loans are currently accounting for around 9% of the lender's new loan applications, well up from 2% in February.
"There's definitely more appetite out there," she said. "There are some really good sharp fixed rates (where) you're actually able to benefit from saving much earlier than waiting to see what happens with the market."
Ms Jackson said fixed rates can offer some security for people who are hesitating to see what happens with the market.
Listen to the full interview with Belinda Jackson below.
So, what is happening with the market?
Some commentators are now tipping there may be another cash rate rise after the RBA's next board meeting on 5-6 August.
Chief economist of Judo Bank Warren Hogan is predicting as many as three more rate rises before the year is out, starting with the first 0.25 percentage point rise next month.
However, the big four banks' economics teams are still forecasting the next move will be a downwards with two predicting cuts by the end of the year and the other two anticipating it won't be until 2025 when interest rates fall.
The home loan market has been relatively steady for the past couple of months, likely waiting to see which way the cash rate will head next.
Some smaller lenders are jumping early.
Heritage Bank drops variable rates, ups fixed
Queensland-based Heritage Bank made its own downward move this week, dropping rates by 15 basis points across a range of its variable Home Advantage and Discount loans for both owner occupiers and investors.
Its Discount Variable loan now offers 6.49% p.a. (6.51% p.a. comparison rate) for LVRs between 80-90%.
At the same time, Heritage applied an across-the-board hike of 20 basis points to a range of its Residential, Home Advantage, and Investment fixed loans for terms between three and five years.
Northern Inland drops fixed loans
Finally, Northern Inland Credit Union sent its fixed rate home loans the other way, cutting rates on a range of Dream Home and Smart Home products by up to 20 basis points for both owner occupiers and investors.
The new rate for its Dream Home loan fixed for two years is 6.39% p.a. (6.73% p.a. comparison rate) for LVR 90% or below.
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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 | LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.06% p.a. | $2,408 | Principal & Interest | Variable | $0 | $530 | 90% | Featured 4.6 Star Customer Ratings |
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5.99% p.a. | 5.90% p.a. | $2,396 | Principal & Interest | Variable | $0 | $0 | 80% | Featured Apply In Minutes |
| |||||||||
6.09% p.a. | 6.11% p.a. | $2,421 | Principal & Interest | Variable | $0 | $250 | 60% | Featured Unlimited Redraws |
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Image by Afif Ramdhasuma on Unsplash
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!
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Hanan Dervisevic
Brooke Cooper
