The first hike-free week since January has opened a short window for brokers to move clients onto better deals — but with the RBA's preferred inflation measure at its highest level in nearly two years, that window may not stay open long.
Not a single lender lifted fixed or variable rates in the past seven days, according to Canstar's latest weekly rate wrap. Canstar data insights director Sally Tindall (pictured) flagged the significance of the pause.
"It was a hike-free week, with no lenders increasing fixed or variable rates in the last seven days – the first of its kind since January of this year," Tindall said. "While this offers a rare moment of breathing room for borrowers, the macroeconomic landscape remains intensely challenging."
Even so, lenders did not stand still. Three lenders trimmed variable rates across 14 owner-occupier and investor products by an average of 0.1%, while two lenders cut 34 fixed rate products by a more substantial average of 0.57%.
The average variable rate for owner-occupiers on principal and interest loans now sits at 6.67%, with the lowest variable rate for any LVR at 5.69%, offered by LCU. Only three rates on Canstar's database sit below 5.75%.
For brokers, the competitive activity is an opportunity worth acting on now. Tindall said the cuts were a signal clients should not ignore.
"There are still signs of competitive pressure in the market, mind you, with three lenders slicing variable rates and two lenders cutting fixed rates, as banks continue to jostle for new business,” she said. “It's yet another reminder borrowers can use this pause from the RBA to get themselves a better deal although they may have to turn themselves from an existing customer into a new one."
EMBED: 06 30 Canstar
The headline CPI figure for May came in lower than expected at 4%, but the RBA's preferred measure of core inflation told a different story — jumping to 3.6%, its highest reading in nearly two years. That result keeps the door open to a further hike at the RBA's August meeting.
If the RBA moves and lenders pass it on in full, the cash rate would climb to 4.6% — a level not seen since 2011. Roy Morgan modelling shows that scenario would push the share of mortgage holders at risk to 30.2%, affecting 1.6 million people.
With industry views on the August decision split, the current pause from hikes is the clearest opportunity available to help clients get ahead of what may come next.
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