Mortgage rate activity remained subdued last week, with a small number of lenders nudging rates in both directions — but the bigger story for borrowers is still playing out in their bank accounts, according to Canstar's latest rate tracker.
Community First Bank lifted one owner occupier variable rate by 0.01%, while Aussie cut two owner-occupier and investor variable rates by 0.04%. On the fixed side, two lenders increased 42 owner-occupier and investor fixed rates by an average of 0.10%, while Hume Bank moved the other way, cutting 18 owner-occupier and investor fixed rates by an average of 0.22%.
Canstar data insights director Sally Tindall (pictured) described the week's activity as muted.
"It was all quiet on the mortgage front this week with two lenders cutting and just three hiking across both fixed and variable rates, despite a warning from the RBA further rate tightening could still be on the cards," Tindall said.
While rate movements on the board were modest, Tindall flagged a more immediate pressure building for households. Banks typically allow up to two months or more before passing rate rises through to repayment schedules, meaning the May RBA hike is still working its way through for many borrowers.
"What's more likely to come down like a hammer is the increase to their monthly mortgage repayments, which for many is still due to land in the next few weeks," Tindall said. "This will be a mid-winter squeeze plenty of families could do without."
The partial extension of the fuel excise reduction was characterised by Tindall as a deliberately gradual transition designed to cushion household budgets — in contrast to the mortgage repayment increases, which she described as a more abrupt and unavoidable impact.
The average variable rate for owner-occupiers paying principal and interest currently sits at 6.68%, but the gap between the market average and the lowest available rates remains significant. LCU holds the lowest variable rate on the Canstar database at 5.69% — 0.57 percentage points below the market average — with three rates sitting below 5.75% in total. 40 lenders are offering at least one advertised variable rate under 6%, including Westpac.
On the fixed side, Tindall noted the lowest available rate is holding at 5.99%, with limited movement expected unless upcoming economic data shifts the outlook materially.
"Meanwhile the lowest fixed rate is still clutching on to its sub-6% status at 5.99% and could well be hanging there for the next couple of weeks in this somewhat stagnant environment, unless of course the data changes and the wind picks up," she said.
Clients still on variable rates above 6% are paying at least 0.31 percentage points more than the lowest rate on the market — and with May hike repayments still to land for many, the next few weeks are a natural prompt for a rate review conversation.
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