Canstar reported on the latest home loan rate movements, highlighting changes in variable and fixed rates for owner-occupiers and investors, with Josh Sale (pictured above), group manager for research, ratings, and product data, revealing cautious lender behaviour amid potential interest rate hikes by the Reserve Bank (RBA).
HSBC increased four owner-occupier and investor variable rates by an average of 0.08%.
Meanwhile, four lenders cut eight owner-occupier and investor variable rates by an average of 0.09%.
The average variable interest rate for owner-occupiers paying principal and interest is now 6.88%, with the lowest variable rate being 5.75%, offered by Arab Bank.
Two lenders increased 15 owner-occupier and investor fixed rates by an average of 0.13%.
In contrast, five lenders cut 58 owner-occupier and investor fixed rates by an average of 0.28%. Currently, there are 17 rates below 5.75% on Canstar’s database.
“This week has seen subdued changes in lending and savings rates, suggesting that lenders are taking a cautious approach as they await RBA’s next move,” Sale said. “Following recent hawkish comments from the RBA and a rise in monthly consumer price index readings, there is a real possibility of an interest rate hike at the upcoming meeting.”
Sale elaborated on RBA’s considerations.
“While inflation remains above the RBA’s target and the labour market is tight, the key will be the upcoming quarterly CPI data, coming out on Wednesday,” he said. “If we see inflation overshooting expectations, the RBA might decide on an increase.
“Alternatively, they could wait to assess the impacts of the adjusted stage 3 tax cuts and household energy subsidies before making a move. The RBA's balancing act between curbing inflation and supporting economic growth will be closely watched.”
In response to the economic uncertainty, lenders and deposit-takers are adopting a cautious stance.
“In the meantime, lenders and deposit-takers appear to be in a holding pattern, reflecting the uncertainty in the economic outlook,” Sale said. “This wait-and-see approach is likely to continue until there is clearer guidance from the RBA on the future path of interest rates.”
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