Australian home loan customers are seeing fixed mortgage rates jump again, even as most post-February Reserve Bank (RBA) variable rate moves appear to be settling, new Canstar data shows.
In the past week, four lenders lifted 32 owner-occupier and investor variable rates by an average of 0.25%, while two lenders cut three variable rates by an average of 0.98%. Sixteen lenders also pushed up 397 owner occupier and investor fixed rates, with average increases of 0.21%. Only one institution, IMB, trimmed two investor fixed rates, by an average of 0.08%.
The average variable rate for owner-occupier borrowers paying principal and interest now sits at 6.16%, while the sharpest variable deal on Canstar’s database is 5.19% from LCU. The pool of ultra-low offers is shrinking fast, with “just seven rates below 5.25% on Canstar's database, down from 18 the week prior.”
Canstar insights director Sally Tindall says lenders have been rapidly repricing fixed rates as they brace for further cash rate action.
“While the post-February RBA variable rate hikes are now largely done and dusted, fixed rates continue to race up the interest rate ladder with 16 lenders hiking just shy of 400 different mortgage rates as banks factored in the high possibility of one, if not more, interest rate hikes in the first half of this year,” Tindall said.
That outlook may have shifted over the weekend, with global tensions reshaping expectations for RBA’s next moves.
“That was, until the weekend. Events in the Middle East will almost certainly push the RBA into a holding pattern, at least for now,” Tindall said, warning that higher fuel costs could feed into headline inflation but also curb spending. “These are all factors that are still to be determined and the RBA knows better than most not to employ knee-jerk strategies."
For borrowers, the data underlines the importance of comparing deals, checking whether their current rate is still competitive, and considering how further economic shocks could affect repayments over the months ahead.
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