Canstar’s latest Weekly Rate Wrap‑up shows fixed home loan rates jumping across the market, while the pool of variable rates below 5.25% continues to shrink, putting pressure on borrowers heading into 2026.
Over the past week, 12 lenders hiked 298 owner‑occupier and investor fixed rates by an average of 0.27%. The average variable interest rate for owner‑occupiers paying principal and interest now sits at 5.91%.
The lowest variable rate for any LVR is 4.99%, offered by Hume Bank on a two‑year introductory product. For first‑home buyers, a 4.99% variable rate is also available from G&C Mutual Bank, Horizon Bank, and Unity Bank.
There are now 498 rates below 5.25% on Canstar’s database, down from 549 the week prior.
Canstar insights director Sally Tindall (pictured) said a flurry of fixed rate increases has followed the Reserve Bank governor’s latest comments on the outlook for interest rates.
“There was a run on fixed rate hikes this week with 12 lenders hiking 298 fixed rates in the space of seven days, including big four bank Westpac,” Tindall said.
“Last Tuesday’s confirmation from Governor Bullock that she didn’t think there would be any rate hikes in the foreseeable future was basically the highlighter running over a trend that’s been in train for a couple of months now on the back of less than impressive inflation data.
“As a result, the number of lenders offering a rate under 5% is starting to slip, which from last count was down from 43 a month ago to just 29 lenders.”
Tindall said the next quarter will be critical for the rate outlook, with household spending and supply constraints likely to influence inflation data.
“A lot rests on the next three months, which isn’t exactly a ‘low spend zone’,” she said. “While a lot rests on whether households splurge in one area but cut costs in another to keep their spending in check, supply is another unknown. If it can keep up, elevated spending might not necessarily lead to higher inflation. Time will tell.”
Rather than banking on rate cuts, Tindall urged mortgage holders to prepare for the possibility of higher rates in 2026 and to take proactive steps now. For brokers, that message reinforces the need to get ahead of repricing conversations and help clients lock in sustainable strategies, rather than waiting for relief that may not come.
“Anyone with a mortgage shouldn’t be pinning all their hopes on this, but instead working out a plan for higher rates in 2026 instead of lower ones. Refinancing is one option. Haggling another,” Tindall said.
“Just know at this stage a rate of 5.51% is pretty much the norm and something under 5.25%, for an owner-occupier is something to crow about but, don’t be surprised if someone else at the BBQ you’re at is in the same boat – there’s over 40 different lenders on the Canstar site offering at least one variable rate under this mark.”
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