Ten lenders have lifted 266 owner-occupier and investor fixed rates by an average of 0.33% in the past week, according to Canstar's latest Weekly Rate Wrap-up, as banks increasingly point to another RBA hike. Three of the big four banks moved within 24 hours of one another, with Westpac taking some of its fixed rates above 7%.
While fixed pricing shifted sharply, the variable side of the market was calmer. Two lenders cut three owner-occupier variable rates by 0.05% over the week. The average variable rate for owner-occupiers paying principal and interest now sits at 6.61%, with the lowest available rate for any loan-to-value ratio at 5.69%, offered by Pacific Mortgage Group. There remain just two rates below 5.75% on Canstar's database, a figure that has held steady week-on-week.
Sally Tindall (pictured), Canstar's data insights director, said the message from lenders is clear: "a pretty clear signal they believe another rate hike is coming."
Westpac and CBA have since moved their forecast RBA hike to next Tuesday, a stance NAB has held for weeks — while ANZ went further, predicting hikes both next week and again in November, following comments from Governor Michele Bullock before the House of Representatives Standing Committee on Economics on inflation risks. Should two further 0.25 percentage point hikes eventuate, the cash rate would reach levels not seen since 2008.
Canstar's analysis, based on a $600,000 mortgage with 25 years remaining, estimates each additional hike adds roughly $91 a month to repayments – a cumulative $364 a month across four hikes, or $606 for a $1 million loan. This week's labour force data from the Australian Bureau of Statistics will factor into the RBA's next decision, alongside broader economic conditions.
For brokers, the message for clients is the same one that's followed each of the past few repricing cycles. Similar repricing has previously prompted brokers to prove their value as fixed rates surged ahead of RBA decisions, and the current climb echoes when the last RBA hike triggered a home loan squeeze and when the big four passed an earlier hike on to borrowers in full.
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