Australia’s home loan market saw a flurry of rate cuts last week, with 31 lenders slashing 306 owner-occupier and investor variable rates by an average of 0.27%, according to Canstar’s latest Weekly Rate Wrap-up.
Meanwhile, 11 lenders trimmed 279 fixed rates, delivering an even sharper average cut of 0.85%.
The average variable rate for owner-occupiers paying principal and interest now sits at 6.4%, while the lowest rate on the market is 5.24% from Horizon Bank – a deal exclusive to first-home buyers with a 30% deposit.
There are now 1,296 rates below 5.75% on Canstar’s database, up from 857 the previous week.
Canstar insights director Sally Tindall (pictured) said Horizon Bank’s new rate sets the pace for the competition.
“After a week of rate cuts from every angle, Horizon Bank has come up trumps with the sharpest new variable rate in the country at 5.24%,” Tindall said.
“That said, this rate is reserved for owner-occupier first home buyers with at least a 30% deposit – no easy feat for someone starting out on the property ladder.”
“Nevertheless, it’s a stake in the ground for the rest of the market, and lenders are lining up right behind this with plenty of competitive offers.”
“Looking at our rate tracker we’ve got over 25 lenders offering at least one variable rate under 5.50% and three of the big four banks offering variable rates as low as 5.59%.”
Tindall noted a growing number of sub-5% fixed rates emerging, even as most borrowers still prefer variable loans.
“Fixed rates continue to fall alongside their variable counterparts,” she said.
“The most recent count shows there are six lenders offering at least one of these rates under 5% from BOQ, Pacific Mortgage Group, Police Bank, Australian Mutual Bank, Community First Bank and Queensland Country Bank.
“While fixing is still largely on the nose for most borrowers, the increasing number of lenders offering fixed rates starting in the ‘4’s will tempt more into locking in their rate.”
New monthly APRA data released Friday revealed CBA – having slashed rates twice in one month – remains the dominant lender among the big four, growing its residential loan book by 6.2% to $586 billion over the past year.
Macquarie Bank also posted strong growth, expanding its housing loan book by 19% over the year to April 2025, though it still holds a modest 6% market share among authorised deposit-taking institutions.
“Macquarie also continues to outperform… although it is still a decent way from the big bank pack,” Tindall said.
