In its weekly rate wrap-up, Canstar reported mixed movements in home loan rates, with some lenders increasing rates while others made cuts – a trend reflecting ongoing uncertainty in the market regarding future rate changes.
In the past week, three lenders increased 15 owner-occupier and investor variable rates by an average of 0.07%, while no lenders cut variable rates. Additionally, two lenders raised 27 fixed rates for owner-occupiers and investors by an average of 0.28%, and two lenders reduced 16 fixed rates by an average of 0.13%.
See table below for the summary of rate changes last week.
“The trend of increasing fixed mortgage rates appears to be slowing, with a mix of hikes and cuts over the past week suggesting that lenders are adopting a wait-and-see approach,” Josh Sale (pictured above), Canstar’s group manager of research, ratings, and product data.
“This indicates some uncertainty in the market regarding future rate movements.”
The average variable interest rate for owner-occupiers paying principal and interest is now 6.88%, with the lowest variable rate for any LVR at 5.74%, offered by Regional Australia Bank.
Other banks offering home loan rates below 5.75% include Australian Mutual Bank, Bank Australia, Horizon Bank, LCU, People’s Choice, Police Credit Union, Queensland Country Bank, RACQ Bank, The Mac, and Unity Bank.
Notably, there are now 26 rates below 5.75% on Canstar's database, up from 22 the previous week.
See table below for the lowest variable rates on the Canstar database.
Sale highlighted a notable development – CommBank’s launch of a digital-only mortgage product, Digi Home Loan. The new loan offers a competitive rate of 6.15%, which is 0.34 percentage points below the bank’s previous lowest variable rate of 6.49%.
“Targeted at new-to-bank customers refinancing online from other financial institutions, this product promises to offer a streamlined and potentially lower-cost option for tech-savvy borrowers seeking a self-managed experience,” Sale said.
“It will be interesting to see how the product is received by consumers, and other major banks will likely be watching with interest.”
Sale also pointed to important upcoming economic indicators.
“The monthly Consumer Price Index (CPI) for April, due this Wednesday, will be crucial,” the Canstar leader said.
“However, the key insight will come from the June quarter CPI, which will likely indicate the Reserve Bank of Australia’s next rate move.
“April numbers from the US showed a slight slowing of inflation from March, and Australian mortgage holders will be eagerly awaiting similar news this week.”
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