Pricing cuts now concentrated in variable rates
More than 30 lenders have implemented a broad round of fixed-rate home loan increases in the lead-up to Christmas, while a smaller group has trimmed variable rates for new business, creating a split in mortgage pricing strategies.
According to Canstar, 35 lenders have raised at least one fixed home loan rate over the past 30 days, with many moves occurring before Reserve Bank governor Michele Bullock’s recent comments that further rate cuts were unlikely in the near term. The repricing suggests lenders have been incorporating expectations of higher funding costs into fixed-rate products in advance of any official cash rate decision.
In the week to 17 December, the number of institutions increasing fixed rates rose from 15 to 19, adding further pressure to borrowers already dealing with elevated living expenses.
Lenders that lifted fixed rates during the period from 9 December to 17 December included Aussie, Australian Mutual Bank, Bank Australia, Bank First, Bank of China, Bank of Melbourne, BankSA, Great Southern Bank, Heritage Bank, ING, NAB, People’s Choice, Police Credit Union, Qudos Bank, St. George Bank, Summerland Bank, Suncorp Bank, Ubank and Westpac.
While fixed rates moved higher, a smaller but notable shift occurred in the variable-rate segment. Over the past month, seven lenders – Aussie, Auswide Bank, Bank of China, Bank of Us, MyState Bank, P&N Bank and Unloan – have reduced at least one variable-rate home loan product, with only one provider moving variable rates higher.
“The catch is these cuts are for new customers only,” noted Sally Tindall (pictured right), data insights director at Canstar. “If you want to benefit, you may have to consider jumping ship.”
The divergence between fixed and variable pricing is emerging as markets and commentators debate the likelihood of a cash rate increase as early as February. For mortgage professionals, the current environment is likely to drive more detailed product comparisons, repricing requests and refinancing discussions, as borrowers seek to understand whether to remain variable, fix for a period, or switch lender.
“A week out from Christmas, the mortgage market shows little sign of slowing down,”Tindall said. “Fixed rates are rising on the tide of economic forecasts, many of which are now predicting rate hikes instead of cuts.”
“Our data shows 35 lenders have hiked at least one fixed rate in the last 30 days – a clear sign banks have been pricing in hikes for a number of weeks now, well before the RBA governor stood up and all but ruled out the possibility of further cuts.”
At the same time, competition for new variable-rate borrowers remains intense, particularly where lenders are targeting refinancers and high-quality customers through sharper headline rates and targeted offers.
Tindall noted that refinancing activity is already elevated and is likely to remain strong over the summer period as borrowers reassess their options ahead of 2026. “Now is the time to take stock of your mortgage and war game what higher interest rates might mean for you in 2026,” she said.
“As you head into the break, know that a rate of 5.51% is the average for an owner-occupier, while a competitive rate really needs to be under 5.25% if you want any sort of bragging rights round the BBQ,” said Sally Tindall, data insights director at Canstar.
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