A mixed week for home loan rates has seen lenders both raise and cut rates, with fixed-rate reductions dominating the landscape ahead of an anticipated rate cut in May.
According to Canstar, five lenders increased 32 owner-occupier and investor variable rates by an average of 0.05%, while another five lenders cut 19 variable rates by a more significant average of 1.03%, during the week of April 14 to 20.
However, the biggest movement came in fixed rates: five lenders cut a total of 119 fixed rates across owner-occupier and investor loans, by an average of 0.31%.
See the latest rate adjustments here:
Compare the latest rate changes with the previous week’s “nips and tucks.”
Canstar data showed that the average variable interest rate for owner-occupiers paying principal and interest is now 6.51%, with the lowest variable rate available at 5.59%, offered by Pacific Mortgage Group.
The number of home loan rates under 5.75% rose to 508, up from 488 the week prior, reflecting an increasingly competitive lending environment for borrowers willing to shop around.
Check out the list of lenders offering rates under 5.75%:
Canstar Data Insights Director Sally Tindall (pictured) noted that several Bendigo-backed lenders were among those to increase their variable rates.
“Last week was a mixed bag of rate changes, with Bendigo Bank and smaller lenders backed by Bendigo, such as Tiimely Home Loans and Qantas Money, hiking variable rates by 0.05%. Not a huge move, but clearly a step away from the competition in the low-rate market,” Tindall said.
The move had immediate impacts on competitiveness.
“As a result, Tiimely has stepped out of the list of lenders offering at least one variable rate under 5.75%, with its lowest rate variable loan now sitting a fraction above at 5.79%,” Tindall said.
Another key shift came from Westpac, which adjusted its advertised package rates.
“Also last week, Westpac restructured its package rate loan, which on paper looks like giant rate reductions but, in reality, is just the bank, and its sub-brands bringing its advertised rates on this loan down to better align with the actual rates customers end up receiving once they’ve negotiated their personalised discount,” Tindall said.
Tindall pointed to a growing trend of fixed rate reductions as a sign of changing expectations around monetary policy.
Speculation is mounting that the RBA will cut the OCR in May, after holding at 4.1% in April, as global risks—led by Trump’s tariffs—weigh on the outlook.
“Fixed rates continue to fall with five lenders cutting a total of 119 fixed rates by an average of 0.31% – further indication banks are starting to price in the chance of a rate cut on 20 May,” Tindall said.
According to RBA’s latest lending data, the share of new home loans with fixed interest rates fell to just 4.2% in February, down from more than 40% at the peak in 2021 – suggesting most borrowers are still opting for variable rates despite the recent wave of fixed-rate cuts.
With rate speculation increasing, the market is closely watching economic indicators.
“While the global outlook remains highly uncertain, one key piece of domestic data – that is, the quarterly CPI results due out next Wednesday – will help piece together the puzzle for the RBA,” Tindall said.
