How have home loan rates changed?

Finance expert talks about the interest rate outlook

How have home loan rates changed?


By Mina Martin

Canstar reported on the lenders who adjusted their home loan rates from Jan. 15-22, as it noted that big bank economists now anticipate the settling of dust on interest rate hikes.

Home loan rate movements

Four lenders opted for an upward adjustment, increasing six owner-occupier and investor variable rates by an average of 0.1%.

When it comes to fixed rates, two lenders implemented changes, raising 20 owner-occupier and investor fixed rates by an average of 0.35%. Conversely, six lenders took a different stance, reducing 63 fixed rates by an average of 0.16%. See table below for the home loan rate changes.

For owner-occupiers paying principal and interest with an 80% LVR, the average variable interest rate stands at 6.91%. The most competitive variable rate, offered by Australian Mutual Bank (three-year intro), is 5.69%, Canstar reported. See table below for the lowest variable rates now on offer.

Notably, there are 18 rates below 5.75% within Canstar's database, providing diverse options for borrowers. These rates are from Australian Mutual Bank, LCU, Police Credit Union, RACQ Bank, and Regional Australia Bank.

Interest rate outlook

Steve Mickenbecker (pictured above), Canstar's finance expert, offered commentary on the current interest rate landscape.

“All four big banks are saying there are to be no more Reserve Bank rate hikes in the current cycle, and all are expecting rate cuts towards the end of 2024,” Mickenbecker said.

“The banks expect the cash rate to further moderate through 2025, three suggesting a rate between 1.25% and 1.75% below the current level. If they're right, relief for borrowers is on the way, but not substantially so until well into 2025.”

Mickenbecke said that considering there are 18 variable rates below 5.75%, borrowers currently on the average variable rate of 6.91% should contemplate advancing their rate reduction by refinancing to a lower-rate loan.

“The interest rate outlook is forecasting rate cuts to be some months away yet, which may give cause to consider a fixed rate loan,” Mickenbecker said. “The average one and two-year fixed rates are 0.37% and 0.44% lower than the average variable rate, providing an immediate benefit.

“Now is not the time to settle for average, nor to be patient. Borrowers must be ambitious in the hunt for lower home loan repayment right now.”

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