The home loan market remained largely steady last week, with only modest movements across variable and fixed rates, according to Canstar’s latest Weekly Rate Wrap-up.
Three lenders cut eight owner-occupier and investor variable rates by an average of just 0.05%. Meanwhile, seven lenders reduced 78 fixed rates by an average of 0.19%.
The average variable rate for owner occupiers paying principal and interest now sits at 5.94%. For first-home buyers, the lowest available variable rate is 4.99%, offered by G&C Mutual Bank, Horizon Bank and Unity Bank. For refinancers, the most competitive rate is 5.08% from in1bank.
Overall, 492 home loan rates below 5.25% are now listed on Canstar’s database, up from 472 the week prior.
Canstar insights director Sally Tindall (pictured) said the market is largely on hold until fresh inflation data is released on Oct. 29.
“The mortgage market is largely back to treading water as the country waits for the next round of quarterly inflation figures due out on October 29,” Tindall said.
“Just three lenders cut select variable rates by a miniscule 0.05 percentage points, on average, and while there was more movement in fixed rates, with seven lenders cutting these rates, it was again by a relatively small average of 0.19 percentage points.”
She noted term deposit activity showed no clear signal of a rate shift.
“Term deposit rates, which can often be a good litmus test of the likelihood of a cash rate change, ended up in a 3-3 tie over the last week, with three banks cutting and three hiking. That’s code for ‘nothing to see here’,” Tindall said.
Tindall said first-home buyers remain a priority for lenders as government support expands.
“First-home buyers remain the flavour of the month, with the government set to uncap the places and income criteria on the Home Guarantee scheme from Wednesday,” she said.
“Lenders both in and out of the scheme are also getting in on the action. As reported last week, the lowest advertised variable rates are now exclusive to these borrowers, while big four bank ANZ has also decided to retain its cash sweetener for first home buyers, although it is scrapping its refinancing cashback from Wednesday.”
Despite record refinancing activity in the June quarter, ANZ is moving away from cashback offers.
“The latest ABS data shows refinancing has hit a record high in the June quarter, which makes it an unusual time for the bank to pull a switching sweetener. However, this might be more a change of strategy from within the bank, rather than a strategy based on what’s happening in the market,” Tindall said.
With NAB now suggesting the next cash rate cut isn’t likely until May 2026, Tindall said there’s a live possibility that 2025 could pass without further relief from the RBA.
“The prospect of no further cash rate cuts in 2025 is a live possibility, with NAB now suggesting the next one isn’t going to land until May of next year,” she said. “This reinforces the idea that if borrowers want further relief, it’s up to the individual to get it, either by haggling or refinancing to a lower rate.
“Canstar lists over 30 lenders currently offering at least one variable rate under 5.25%, so for borrowers falling short of this mark, this could be your new stretch target.
“For investors paying interest-only, the target is more likely to be around the 5.7% mark, with Canstar showing there are 30-plus different lenders offering rates for these borrowers below this bar.”
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