A borrower with a $600,000 mortgage could pay another $92 a month if the Reserve Bank of Australia (RBA) lifts the cash rate in November, Canstar estimates, as lenders keep variable home loan rates in a tight band ahead of the latest consumer price index (CPI) figures.
Canstar insights director Sally Tindall (pictured) said the inflation data, due from the Australian Bureau of Statistics (ABS) at 11.30am AEDT on Wednesday 28 October, is likely to decide the RBA’s next move.
Unemployment has edged up to 4.7%, above the current forecast from the RBA, but Tindall expects inflation to outweigh the jobs data. RBA deputy governor Andrew Hauser and chief economist Sarah Hunter both spent the past week preparing the market for a possible hike should the CPI result fall outside an acceptable range.
Trimmed mean inflation, a key gauge of underlying price pressure, has sat at 3.6% since June. A repeat or a rise would make it 10 monthly readings without a fall in core inflation.
“If trimmed mean clocks in again at 3.6%, it will officially be groundhog day,” Tindall said.
For a borrower whose $600,000 loan dates back to the start of the 2026 hikes, a November rise would bring the cycle to five increases and lift monthly repayments by $456 in total. It would also add to the pressure brokers flagged as renewed fears of another RBA rate hike surfaced.
“That’s basically an extra half a grand that a typical borrower has to shell out in post-tax dollars, every single month for the foreseeable future,” she said.
Lender pricing was evenly divided last week. Three lenders lifted 18 owner-occupier and investor variable rates by an average of 0.24 percentage points, while three lenders cut 10 rates by an average of 0.08 points. Tindall said the even divide was “a split broadly reflective of a market in a holding pattern.”
Cheaper deals are thinning out. Canstar’s database now lists 12 rates under 6%, down from 19 the week before, when three lenders shared the lowest variable rate. Bank Orange still offers the lowest variable rate for any loan-to-value ratio (LVR) at 5.89%. The average variable rate for owner-occupiers paying principal and interest is 6.84%.
Among the cuts, Macquarie lowered interest-only rates for owner-occupiers and investors. Tindall saw this as a sign of greater risk appetite, but with reductions capped at 0.10 percentage points, “this is not the bank swinging its doors wide open.”
Borrowers taking out a Qantas Money home loan can now pick between bank and non-bank funding, after the white-label provider added a ColCap-funded option to its Bendigo-funded range. Both carry 100,000 Qantas Points a year. The ColCap loan is 0.01 percentage points cheaper on rate, though Tindall said the price edge fades once fees are counted.
In Tindall’s view, the bigger trade-off is the offset account. Bendigo, an authorised deposit-taking institution (ADI), offers a separate offset, while ColCap, a non-ADI lender, uses a “sub-offset” held within the loan.
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