Home loan rate changes remain minor

This week’s home loan rate changes saw modest adjustments from lenders, with Canstar’s data showing no significant shifts in the market.

Up increased one owner-occupier and investor variable rate by an average of 0.05%, while IMB reduced five similar variable rates by 0.07% on average.

In the fixed-rate space, HSBC raised 36 owner-occupier and investor fixed rates by an average of 0.33%. Conversely, two other lenders cut seven fixed rates by 0.14% on average.

For a summary of last week’s home loan rate adjustments, see table below.

The current average variable interest rate for owner-occupiers paying principal and interest sits at 6.83%, while the lowest variable rate available is 5.75% (excluding introductory rates), offered by Abal Banking, Canstar data showed.

However, the number of home loan rates below 5.75% dropped slightly to 233 from 235 the previous week. See on the table below which lenders are offering rates below 5.75%.

Insights from Canstar: Higher home loan rates here to stay

Sally Tindall (pictured above), Canstar’s data insights director, characterised the week as quiet, with rate changes having little overall impact.

“There were a handful of cuts and hikes across variable and fixed rates this week but none of any major significance,” Tindall said.

TIndall noted that banks have recently adjusted savings rates, with ANZ reducing its Progress Saver maximum rate to 4.10%. These changes highlight banks’ ability to alter rates independently of RBA, as they respond to profit pressures and competition in the home loan sector.

Inflation and borrower challenges

Tindall also addressed RBA’s challenges, citing the latest inflation data as a disappointment.

“This once again rules out a rate cut in 2024 and puts a big question mark over any rate cut before May at the earliest,” she said.

Existing borrowers are expected to endure high rates into the summer, though relief may come for first-home buyers through the government’s recently passed Help to Buy scheme.

The program, allowing eligible buyers to co-purchase homes with the federal government using deposits as low as 2%, aims to provide affordability and stability for lower-income Australians.

“Reducing the need for lower-income earners to take on giant Santa sacks of debt reduces the biggest burden of homeownership in this country – property prices," Tindall said.

To compare the latest home loan rate changes with last week’s figures, click here.

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