Canstar reveals latest mortgage rate changes

Ultra-competitive fixed rates on a fast decline

Canstar reveals latest mortgage rate changes


By Mina Martin

The mortgage market has had a dynamic week marked by various rate adjustments, including a fast decline in ultra-competitive fixed rates, latest Canstar insights has revealed.

Canstar’s latest weekly rates wrap-up showed that 25 lenders have increased 209 owner-occupier and investor variable rates by an average of 0.26%, while two have opted to cut two of theirs by an average of 0.16% during the week of Nov. 20-27.

Over the same week, 16 lenders have implemented increases in 283 owner-occupier and investor fixed rates, averaging 0.18%, while two lenders have reduced four fixed rates by an average of 0.2%.

See last week’s rate adjustments in the table below.

Variable rate adjustments

Following the changes, the average variable interest rate for owner-occupiers paying principal and interest now sits at 6.86% for an 80% LVR. The lowest variable rate for any LVR stands at 5.49%, available through Australian Mutual Bank and Hume Bank (both offering introductory rates).

There are currently five rates below 5.5% on Canstar’s database, down from eight in the previous week.

See table below for the lowest variable rates now on offer.

Effie Zahos (pictured above), Canstar’s editor-at-large and money expert, said Canstar analysis showed that 71% of variable rate lenders on Canstar’s database increased rates by an average 0.26% since the November cash rate decision. Despite these increases, there are still 43 rates below 5.75%, providing borrowers with options in a changing landscape.

Competitive fixed rates fading

Over the same period, the ultra-competitive short-term fixed rates are fast diminishing, as an escalating number of lenders increase fixed rates to safeguard their profit margins.

“Last Friday both Westpac and NAB increased the bulk of their fixed rates for both owner-occupiers and investors, by up to 0.25 percentage points,” Zahos said.

“Westpac’s cheapest one-year fixed rate is now 6.59% for an LVR of 70% or less or 6.69% for an 80% LVR, which is only 0.17 percentage points cheaper than the average variable rate at 6.86%. NAB’s one-year fixed rate is now at 6.69% for 70% or less LVR or 6.74% for 80% LVR.

For borrowers seeking a short-term fixed rate, the most affordable one-year fixed rate available is 5.5% for a 60% LVR or 5.79% for an 80% LVR. This represents a difference of at least 1.07 percentage points compared to the average variable rate of 6.86%.

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