Australian mortgage brokers are staring down another nervous RBA decision today, as fresh Canstar data shows fixed rates marching higher and the sharpest variable offers thinning out.
According to Canstar’s latest Weekly Rate Wrap-up, two lenders decreased 11 owner-occupier and investor variable rates over the past week, with cuts averaging 0.14%. In contrast, six lenders increased 113 fixed rates for both owner-occupiers and investors, with an average rise of 0.26%.
The lowest variable rate for any LVR now sits at 4.99%, offered to refinancers by Pacific Mortgage Group and to first-home buyers by Horizon Bank, G&C Mutual Bank, and Unity Bank. However, the ultra-competitive end of the market is shrinking, with 227 rates below 5.25% on Canstar’s database, down from 255 the week prior.
“It’s going to be an anxious wait up to 2.30pm today with the RBA expected to announce a return to rate hikes,” Canstar.com.au data insights director Sally Tindall said.
Tindall notes RBA is running out of time to finish the inflation fight.
“While it’s possible the RBA could re-issue another warning, rather than a hike, it’s pressed by the passage of time,” she said. “The board has been battling inflation for four long years and while it’s made huge progress since December 2022 when inflation was running hot at 7.9%, this last leg is proving to be the most problematic.”
She adds that “banks are still pricing in a rate hike, or two, with six lenders increasing at least one fixed rate in the last week and an eye-watering 60 hiking fixed rates since the last RBA meeting back in December.”
For customers wondering if they have missed the boat on fixed rates, Tindall says there is still a window – but only for those willing to shop hard.
“While there’s just six lenders still offering fixed rates under 5%, a figure that’s likely to drop to zero on the back of an RBA hike, there’s still merit in fixing for those looking to get certainty back into their mortgage repayments, but only if you shop around,” the Canstar leader said.
Tindall warns that “the difference between an average fixed rate, and a competitive one can make all the difference,” underlining the importance of brokers benchmarking every recommendation.
Variable-rate clients shouldn’t simply accept higher repayments, Tindall stresses.
“Those borrowers sticking with variable should know they don’t have to accept a rate rise without a challenge,” she said. “If they haven’t negotiated in the last six months, now’s the time – especially if their rate is above the average, which, for an owner-occupier rate is 5.52%. A quick 10-minute call could be all it takes to mitigate the impact of one, or more rate hikes.”
For borrowers already feeling the strain, Canstar urges early intervention.
“If your lender doesn’t budge and you know you’re not going to clear your next repayment, it’s time to start talking to them about your options, which could include a switch to interest-only repayments or part payments for a period of time,” she said.
Tindall recommends independent guidance before locking in any hardship measures, noting that “The National Debt Helpline can help here, connecting you with an independent counsellor that’s free of charge.”
For brokers, the latest movements underscore the need to get on the front foot: audit client books, renegotiate where possible, and be ready with clear, proactive strategies for both rate hunters and households under pressure.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
