Australia’s big four banks and dozens of smaller lenders have moved early on mortgage pricing, sharply lifting fixed rates and, in some cases, nudging variable loans higher ahead of the Reserve Bank’s first interest rate decision of 2026.
Exclusive Canstar figures to 21 January show 53 lenders have raised at least one fixed home loan rate since the RBA’s 9 December meeting – including all four majors – while two providers have already increased variable rates, The Courier Mail reported.
According to Canstar, repricing has been widespread, with some fixed terms rising by as much as 70 basis points in the space of weeks.
Commonwealth Bank led the charge on January 15, lifting its three‑year fixed rate by 0.7 percentage points to 6.04%,adding more than $200 a month to repayments for some borrowers. Macquarie Bank also hiked fixed rates by 0.25 percentage points across all terms, its second increase in six weeks.
Canstar.com.au data insights manager Sally Tindall (pictured) said banks were responding to the prospect of a higher cash rate.
“Fixed rates starting with a ‘4’ now have a target on their backs. Just 12 lenders are offering at least one rate under 5%, down from over 40 just three months ago,” Tindall said.
“This is a pre-emptive move by the banks to counter a higher cash rate in 2026. This is yet another signal that borrowers need to start getting prepared.”
The fixed‑rate hikes come after RBA Governor Michele Bullock warned in December that another move was “on the cards”, having last lifted the cash rate by 25 basis points to 4.35% in November 2023 amid concerns inflation was “still too high”.
In a worrying signal for variable‑rate customers, Heritage Bank and People’s Choice have increased six owner‑occupier and investor variable loans by an average of 0.10 percentage points in the past week – equivalent to half of a standard RBA move.
The timing is sensitive. The latest monthly data showed inflation at 3.4% in November, down from 3.8% but still above the RBA’s 2–3% target band, with housing costs up 5.2% over the year.
“While the RBA goes to great lengths to remind us there’s no one dataset or number its decision-making rests upon, next Wednesday’s quarterly inflation results are critical to the equation,” Ms Tindall said.
“If inflation makes a concrete move in the right direction, it’s likely to be enough to ward off a hike at the first meeting of 2026. If it shows it’s treading water, then some tough conversations will be had around that boardroom table and we could well see a hike.”
Mortgage brokers now face a sharply split 2026 outlook, with some economists warning of fresh RBA hikes while Westpac still sees scope for further cash‑rate cuts.
For your clients on variable owner‑occupier loans, the average rate is about 5.52% – but Canstar’s data suggests many of them should be able to secure a sharper deal.
Tindall said borrowers with a solid repayment history should be aiming lower. She noted more than 40 lenders currently have at least one variable rate at or below 5.25%.
“Now is the time to audit your current home loan and challenge your lender for a better rate, as the disparity between market leaders and laggards is widening, and loyalty rarely pays,” Tindall said.
For clients still thinking about fixing, she warned the window for sub‑5% deals is closing fast.
“For those still hoping to fix under 5%, you haven’t missed the boat entirely, but the clock is ticking," the Canstar leader said. "Fixed rates under 5% could be relegated to the past by the time the next RBA decision comes around.”
Tindall also urged borrowers to fully understand the trade‑offs before locking in.
“Fixed rates come with plenty of extra rules and caveats, such as caps on extra repayments, often no access to an offset account and break fees if you want to get out early," she said. "These are all things you’ll need to weigh up before you lock in.”
Canstar estimates that a single 0.25 percentage point cash rate rise would add about $90 a month to repayments on a $600,000 mortgage, $112 on a $750,000 loan and $150 on a $1 million mortgage, underscoring the need for households to stress‑test their budgets ahead of the RBA’s February call, The Courier Mail reported.
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