Banks are making modest adjustments to home loan pricing as the market braces for the Reserve Bank’s next cash rate decision, according to Canstar’s latest Weekly Rate Wrap-up.
Bank First has increased three owner-occupier variable rates by an average of 10 basis points, while trimming six investor variable rates by around 5 basis points. Five lenders lifted a total of 75 owner-occupier and investor fixed rates, with average rises of 0.15 percentage points. Regional Australia cut two investor fixed rates by about 0.06 percentage points.
The average variable rate for owner-occupiers paying principal and interest now sits at 6.43%, with the lowest variable rate at 5.44%, offered by LCU. Canstar’s database shows 82 rates below 5.75%, unchanged week-on-week.
Whether those sub‑5.75% offers can last will depend in part on the Reserve Bank’s next move.
“This afternoon is crunch time for the nation,” Canstar insights director Sally Tindall (pictured) said. “That’s when we discover whether the RBA will inflict us with higher rates to rein in inflation or grant borrowers a temporary reprieve until at least mid-June.”
Tindall noted that “The board will almost certainly consider a ‘wait and see’ approach,” but warned the central bank still needs to tame stubborn inflation.
She highlighted the potential impact of another move.
“If the RBA does fire off another hike today, for someone with a $600,000 mortgage and 25 years remaining, that’s another $91 on top of an already weighty expense,” Tindall said.
Across three hikes, that would mean about $272 extra each month.
So far, discounting has been limited compared with the 2022–23 hiking cycle.
“In the last rate hiking cycle of 2022 and 2023 we saw banks slashing new customer variable rates left, right, and centre in a bid to attract new customers on to their books,” Tindall said, noting this time only a handful of lenders are cutting.
ING is among the few, with a new-customer variable rate as low as 5.74% for borrowers with a 30% deposit, placing it in a pack of around 40 lenders with at least one rate under 5.75%. However, this still sits above the market low of 5.44% and could face renewed scrutiny if lenders reprice in response to any further cash rate moves.
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