This past week saw minor yet significant movements in the mortgage market.
This week, five lenders lowered their variable rates by an average of 0.07%, while two others cut 28 fixed rates by an average of 0.17%, Canstar reported.
These changes indicate a responsive shift in the lending landscape, potentially influenced by broader economic factors.
For a snapshot of last week’s rate changes, see table below.
According to Canstar, the average variable interest rate for owner-occupiers paying principal and interest stands at 6.83%, maintaining the lowest rate for any loan-to-value ratio (LVR) at 5.75%, offered by Abal Banking. The total count of rates under this figure has increased to 178 from 168 just last week.
See table below for the list of lenders with rates below 5.75%
Sally Tindall (pictured above), Canstar’s data insights director, commented on the market’s behaviour.
“It was another quiet week in the mortgage market with just Macquarie Bank and BCU cutting fixed rates, while the Teachers Mutual Group and Summerland Bank cut variable rates for new customers,” Tindall said.
She noted that the forthcoming quarterly consumer price index (CPI) figures are crucial in determining future Reserve Bank (RBA) decisions regarding the cash rate.
“The next round of quarterly CPI figures, due out today, will play a critical role in determining whether the RBA cuts the cash rate when it next meets in February,” Tindall said.
Tindall stressed the importance of sustainable easing in inflation, particularly in services, which RBA is closely monitoring.
Tindall also discussed the broader economic context, noting the resilience of Australia’s job market and the effectiveness of government economic support measures, despite the challenges of high rates and inflation impacting households.
She highlighted that, despite rising mortgage arrears, the situation remains manageable due to recent financial relief measures for households.
“Australia’s cash rate might have been steady at 4.35% for the last 15 months, However, mortgage rates have not been as steady, which makes now an ideal time to do a health check on your rate before any cuts cloud the picture,” Tindall said.
She pointed out that while the average variable rate for owner-occupiers has dropped to 6.33%, competitive rates below 6% are still available, particularly the lowest at 5.75%.
For investors, the scenario is tighter with the average variable rate at 6.59% and fewer options below 6%, but opportunities remain for competitive rates starting with a “5.”
This week’s mortgage rate adjustments reflect cautious optimism in the lending market, with economic indicators like inflation and employment playing key roles in future rate decisions.
