Three lenders now offer the cheapest variable home loan on Canstar’s database, even as pricing climbs across much of the market following the latest Reserve Bank (RBA) hike.
Bank Orange, Regional Australia Bank, and Summerland Bank each offer a 5.89% variable rate for any loan-to-value ratio (LVR), according to Canstar’s latest weekly rate wrap-up. Bank Orange’s offer came after the bank applied its post-September RBA changes.
“We might well have a new lowest variable rate on our hands,” said Sally Tindall (pictured), data insights director at Canstar.
The new floor emerged during a busy week for repricing. Variable pricing rose at 26 lenders, averaging 0.24 percentage points across 182 owner-occupier and investor loans.
On the fixed side, six lenders raised 56 rates by an average of 0.21 percentage points, while just two cut six rates by an average of 0.18 percentage points. Nineteen rates on Canstar’s database now sit below 6%.
With a few banks yet to pass on the latest RBA hike, the rankings could still move. Tindall said, however, that “the fact that the baton has changed hands is a clear win for competition at the pointy end of the market.”
According to Tindall, the prospect of another hike in 2026 became less certain last week after Australia’s unemployment rate rose to 4.7%. That is above the RBA’s forecast of 4.5% for the final quarter of the year.
She acknowledged the RBA had signalled it was willing to accept higher unemployment to bring inflation down. However, she noted that “this weaker-than-expected data will add to the case for a hold” at the RBA’s next monetary policy meeting, due in two weeks.
Beyond rate movements, Suncorp’s transition to ANZ next year is changing loan terms for some customers. While interest rates on Suncorp mortgages may stay the same after the move, Tindall warned that “the fine print is not.”
Borrowers who have made extra repayments are likely to feel the biggest impact, with minimum monthly repayments set to rise. Tindall said the change could help them pay less interest in the long term, but some may be unable, or unwilling, to take on the higher amount.
She said affected customers could contact the bank to restructure their loan, so it reverts to the old repayment calculation, though doing so means taking longer to pay off the debt.
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