Rate movements were mixed, but the overall direction remains upwards for many mortgage customers.
Five lenders lifted a total of 35 owner-occupier and investor variable rates, with average increases of 0.25 percentage points. ING broke ranks by trimming four owner-occupier and investor variable rates by 0.10 percentage points, effective 2 May.
Canstar’s data shows the average variable rate for owner-occupiers paying principal and interest is now 6.43%, while the lowest variable rate for any LVR sits at 5.49%, offered by Pacific Mortgage Group. There are still 82 rates below 5.75% in Canstar’s database, unchanged from the previous week, giving brokers some competitive options for rate-sensitive refinancers.
Canstar insights director Sally Tindall said the latest central bank move has clearly shifted lender behaviour.
“And so, the rate hike floodgates re-open with the third cash rate hike in as many RBA meetings,” Tindall said.
On the fixed side, nine lenders increased 152 owner-occupier and investor fixed rates, with average rises of 0.33 percentage points and further changes expected.
“Around 60 lenders have announced their post-May RBA rate hikes, with all confirming they’ll be passing the increase on in full to variable borrowers,” Tindall said.
She said effective dates range from 8 May through to June, with most customers of the big four banks seeing higher repayments from Friday.
Major-bank forecasts remain divided on whether the Reserve Bank has finished tightening, but the risk of further hikes has not disappeared. Against that backdrop, Tindall said brokers should encourage clients to prepare for further pain.
“What this means for borrowers is that they should start planning for at least one more hike, two if they’re being prudent,” the Canstar leader said.
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