Coinciding with the widespread expectation of a November cash rate hike, several lenders have made rate adjustments between Oct. 23 and 30, according to Canstar’s weekly interest rates wrap-up.
Over the week, six lenders on Canstar’s database increased owner-occupier and investor variable rates by an average of 0.22%, while two lenders cut rates for four such loans by an average of 0.09%.
“There’s still a difference of 1.19 percentage points between the cheapest variable rate with an 80% loan to value ratio on Canstar’s database at 5.49% when compared to the average variable rate at 6.68%. On a $500,000 loan over 30 years, that's a saving of about $380 on your monthly repayments,” said Effie Zahos (pictured above), Canstar’s editor-at-large and money expert.
There had also been fixed rate changes, with two lenders lifting rates on 31 owner-occupier and investor fixed loans by an average of 0.21%, while two others cut rates for three fixed loans by an average 0.32%.
See the table below for the variable and fixed rate changes.
Following this week’s rate moves, the average variable interest rate for owner-occupiers paying principal and interest is now 6.68% at an 80% LVR, with the lowest variable rate at 5.45%, offered by Arab Bank.
On Canstar’s database, there are now nine rates below 5.5%, up from eight the previous week. These rates are available at Arab Bank Australia, Australia Mutual Bank, LCU, RACQ Bank, and Regional Australia Bank.
For the list of the lowest owner-occupied home loan rates at the Canstar database, refer to the table below.
On the Reserve Bank’s next cash rate decision, Zahos said an interest rate hike on Melbourne Day is now looking more likely, with the September 2023 quarterly inflation figures coming in higher than expected.
“The RBA Rate Indicator shows market expectations of an increase in the official cash rate to be 47% on Oct. 37, up from 21% the week before,” she said. “And all big four banks are now forecasting that the Reserve Bank will increase the cash rate in November.”
“While the inflation numbers may justify another rate hike, the problem is that increasing the cash rate may have very little impact on inflation. The key areas pushing the inflation rate up are petrol, rents and insurance and they are not really able to be controlled by interest rates. It will be a tough call for the Reserve Bank to make.”
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