Variable and fixed home loan interest rates moved in different directions in 2021, as lenders continued to push down variable rates but moved their fixed rates higher.
According to comparison site Mozo, in the variable rate segment the average owner occupier rate came down 26 basis points to 3.27 per cent through the course of the year.
The lowest owner occupier principal and interest variable rate on offer at the end of the year was 1.77 per cent for Reduce Home Loans’ Super Saver Variable. At the beginning of 2021, the lowest owner occupier variable rate was 1.99 per cent.
Among the big banks, ANZ reduced its basic variable owner occupier rate by 23 bps to 2.49 per cent over the course of the year, Commonwealth Bank by 30 bps to 2.39 per cent, NAB by 40 bps to 2.29 per cent and Westpac by 50 bps to 2.29 per cent.
Mozo said new entrants added more competitive pressure. Nano Home Loans which only offers refinancing, launched with a variable rate of 1.99 per cent. One Two Home Loans also launched with a variable rate of 1.99 per cent and an offer that sees the rate reduced by up to 15 bps as the loan is repaid.
The average investor variable rate fell 21 bps to 3.48 per cent through the year. The lowest rate at the end of the year was 2.33 per cent - 34 bps lower than at the start of the year.
In the fixed rate segment, the average rate for a one-year term fell through the year, while average rates for other terms rose.
The average rate for a one-year term fell 2 bps to 2.37 per cent. The lowest rate for a one-year term at the end of last year was 1.15 per cent – 30 bps lower than at the start of 2021.
The average rate for a two-year term rose 12 bps to 2.35 per cent. The biggest increase was in the average rate for a four-year term, which rose 67 bps to 3.08 per cent.
The rate leaders in the fixed-rate segment include Greater Bank, Australian Mutual Bank, Qudos Bank and BankVic.
Among the big banks, ANZ increased its five-year rate by 130 bps to 3.59 per cent over the course of the year and Westpac increased its four-year rate by 130 bps to 3.29 per cent.