Canstar’s latest analysis is a reminder for mortgage advisers to help clients stay on the front foot as fixed home loan rates edge higher and cost‑of‑living pressure keeps mortgages front and centre in Australian households’ worries.
Canstar’s latest Weekly Rate Wrap‑up shows only a small move in variable rates this week, but a much more noticeable shift in fixed pricing as lenders respond to stubborn inflation and a stronger labour market.
On the variable side, two lenders cut five owner‑occupier and investor rates by an average of 0.19%. The average variable interest rate available to new owner‑occupiers paying principal and interest now sits at 5.92%.
The lowest variable rate for any LVR remains 4.99%, offered by Geelong Bank and Hume Bank. For first‑home buyers, that 4.99% rate is also available from G&C Mutual Bank, Horizon Bank, and Unity Bank.
There are still 598 rates below 5.25% on Canstar’s database – but that’s down from 621 the previous week, highlighting how sharper deals are slowly thinning out.
Canstar.com.au data insights director Sally Tindall (pictured) said lenders have been steadily repricing fixed rates upwards.
“Fixed rates are on the rise on the back of yet another round of higher-than-expected inflation data and a falling unemployment rate, which both point to the end of cash rate cuts,” Tindall said.
“Canstar rate tracking shows in the space of two months, 18 lenders have hiked at least one fixed home loan rate, including hikes from Westpac and Macquarie.
“As a result, the number of lenders offering at least one fixed rate under the sought-after 5% is starting to drop, albeit from a relatively high base. Our data shows there are 36 lenders offering fixed rates under 5%, a decent list to pick from for owner-occupiers, but that’s down from 46 lenders a month ago.”
Tindall noted recent inflation readings have been distorted by government bill relief, masking underlying price pressure in key areas like power bills.
“Electricity rebates continue to rattle the inflation data, with the October results recording a 37% rise in the past year, but a drop of 10% in the last month – now that’s a yoyo – primarily due to the timing of state and federal government rebates. Strip them out and the real story becomes clearer, which is unfortunately higher electricity prices to the tune of around 5% per annum. Not exactly a good news story in a cost-of-living crunch unless the government opts for Energy Bill Relief 3.0.”
Canstar’s Consumer Pulse report, released this week, shows housing costs remain front of mind for borrowers and renters alike.
“Canstar’s Consumer Pulse report is out this week, and what it shows is that housing – that is, the cost of paying the mortgage or rent – remains the biggest worry for Australians for the fourth year in a row,” Tindall said. “This is unsurprising considering the fact we’ve only seen three cash rate cuts following the 13 rate hikes across 2022 and 2023, four of which were doubles.
She said a typical borrower who owed about $600,000 on their mortgage in 2022 with 25 years remaining would still be paying more than $1,000 a month extra compared to pre‑hike levels if they hadn’t negotiated a better rate.
Tindall said active negotiation remains the central lever households can pull to relieve pressure.
The Consumer Pulse data also shows a meaningful share of property owners are at least contemplating a sale.
“Interestingly, the report found that just over one-quarter of property owners, or 26%, are open to selling in the next two years," Tindall said. "While downsizing and upgrading were the two primary reasons, 19% of potential sellers say they are considering offloading their property because they cannot afford higher loan repayments.
“While there’s often a big difference between thinking about something and actually going through with it, especially with a decision as big as selling, the fact that the mortgage is weighing on the minds of so many Australians is telling.”
For mortgage brokers, that’s both a warning and an opportunity: clients are under real stress, but a well‑timed rate negotiation, restructure, or refinance may be enough to keep more of them in their homes rather than pushing them towards a forced sale.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
