How rates moved last week

Insights on future interest rate directions and more

How rates moved last week


By Mina Martin

In the latest round of home loan rate adjustments, the Bank of Sydney increased several owner-occupier and investor variable rates, while multiple lenders adjusted fixed rates, Canstar reported.

According to Canstar, these changes reflect broader trends in the market and economic impacts from recent policy decisions.

Here’s a closer look at the latest movements in home loan rates and what they mean for borrowers.

Rate adjustments across lenders

The Bank of Sydney increased four owner-occupier and investor variable rates by an average of 0.08%. Additionally, three lenders increased 77 owner-occupier and investor fixed rates by an average of 0.20%, while Me Bank cut 10 fixed rates by an average of 0.07%.

See the summary of rate changes for the May 13 to 20 week.

To compare the latest changes to the previous week’s, click here.

Current rate overview

The average variable interest rate for owner-occupiers paying principal and interest is 6.88%, with the lowest variable rate for any LVR at 5.74%, offered by Regional Bank Australia.

There are 22 rates below 5.75% on Canstar's database, which has remained stable week on week. See table below for the lowest variable rates available in the market.

Commentary from Canstar

Josh Sale (pictured above), Canstar’s group manager of research, ratings, and product data, commented on the trend of rate adjustments.

“Much like last week, a number of providers have adjusted their fixed interest mortgage rates, with more increases than decreases,” Sale said. “Observing this trend over the coming weeks will provide insight into lenders’ expectations regarding future rate directions.”

Federal budget impact

Sale also discussed the federal budget's impact.

“The federal budget handed down last week offered some much-needed cost-of-living relief, the most notable being a $300 energy bill subsidy for every household,” he said.

“While this should provide immediate relief to power bills and potentially ease headline inflation in the short term, the medium-term effects, combined with the revised stage three tax cuts, could prove to be inflationary – only time will tell.”

Inflation and rate predictions

Regarding inflation and interest rates, Sale said, “Given the Reserve Bank's preference to consider inflation excluding volatile items, for example energy, it is unlikely that the budget's measures will contribute to lowering home loan interest rates in the short term.

This aligns with the federal government’s updated budget forecasts, which do not expect a decrease in the cash rate until mid-next year.

Support for financial hardship

Sale stressed the importance of support for those facing financial hardship.

“ASIC has just released a report emphasising the need for banks to enhance their support for Australians facing financial hardship,” he said. “If you are experiencing financial difficulties, your first step should be to approach your bank. It is crucial to ask for a detailed explanation of all available options.”

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