The post-RBA rate movement cycle continued in earnest last week, with 24 lenders lifting 185 owner-occupier and investor variable rates by an average of 25 basis points, according to Canstar's weekly rate wrap-up. On the fixed rate side, seven lenders raised 142 products by the same margin.
Not all movement was upward. Australian Military Bank trimmed three investor variable rates by an average of 10 basis points, while Great Southern Bank reduced seven fixed rate products by an average of 14 basis points.
EMBED: 05 26 Canstar
The competitive end of the market also tightened noticeably. Canstar data shows just 10 variable rates sitting below 5.75%, a sharp fall from 49 the previous week. The lowest variable rate currently available is 5.64% through Police Credit Union for first-home buyers, or 5.69% via Unloan for refinancers. The average variable rate for new owner-occupiers paying principal and interest now sits at 6.64%.
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Canstar insights director Sally Tindall (pictured) called out Macquarie Bank among those still passing through the hike.
"The May RBA rate hikes rolled in again last week with another 24 lenders hiking variable rates. This includes challenger bank Macquarie which has made a point of increasing its existing customer rates later than its big bank competitors, in a show of goodwill, and probably a bid to get a 'one-up' on the majors."
For borrowers currently comparing lenders, the staggered timing of rate increases creates a real risk of confusion. Tindall noted the timing risks confusing borrowers mid-decision: "Late-in-the-piece rate hikes for new customers, however, can get confusing for those trying to compare their options if they're weighing up pre-May RBA rates versus post ones."
For anyone about to sign a new mortgage, she had clear advice — "it's worth a direct question to your new bank so there's no surprises just days after the deal has been done."
Some lenders are not expected to complete the pass-through until early June, a function of system configurations rather than deliberate strategy. Once the full cycle is complete, Tindall said the lowest variable rate on the market is expected to land at 5.69%, with very few products remaining under the 5.75% threshold.
That uncertainty sits against a backdrop of shifting economic data. April's seasonally adjusted unemployment figures came in at 4.5%, and Tindall pointed to that result as a factor likely to give the RBA reason to hold at its June meeting.
"We already know from the May Board minutes that the RBA is well positioned to hit pause on the cash rate hikes at its next meeting, to give the economy and households time to catch up on the last three rounds of hikes and the impact of the fuel supply shocks."
CPI data is due imminently, and while the halving of the fuel excise is expected to suppress headline inflation, core inflation may edge higher. Tindall suggested neither figure is likely to shift the Board's calculus materially when it meets on 15 and 16 June.
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