Canstar's Tindall tells stretched borrowers to ask for a rate cut first
Thirteen Australian lenders lifted a combined 312 fixed home loan rates in the past week, according to Canstar's weekly rate wrap-up. The result comes ahead of the Reserve Bank (RBA) cash rate decision on 29 September.
The fixed rate increases, for both owner-occupiers and investors, averaged 0.26 percentage points.
Sally Tindall (pictured), data insights director at Canstar, described the week's fixed rate moves as a sharp reversal.
Where rates sit
The standout move came from Australia's biggest bank, which raised its lowest two-year fixed rate by 0.48 percentage points. That's just two basis points short of a 50-basis-point RBA move, Tindall noted.
On the variable side, ING raised two owner-occupier variable rates by 0.05 percentage points.
Canstar's data puts the average variable rate for owner-occupiers paying principal and interest at 6.62%. The lowest variable rate on its database, across any loan-to-value ratio (LVR), is 5.69%, offered by Pacific Mortgage Group. The number of rates below 5.75% has held steady at two.
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Cash rate outlook
Tindall pointed to eight months of core inflation data without improvement, with rising petrol prices expected to push headline inflation higher.
"All things considered, it's difficult to see how the board will leave that meeting room without a hike," she said.
A rise would take the cash rate to its highest level since October 2011, according to Canstar's data insights director.
Buffers and hardship options
In Tindall's view, most households can absorb a further rise, though some will need to draw on their savings buffers. Borrowers who can't cover higher repayments should raise hardship support with their lender early, she said, rather than wait until a payment is missed.
The savings picture is mixed. Australian Prudential Regulation Authority (APRA) data shows offset balances are hovering around record levels, yet full-year results from the Commonwealth Bank of Australia (CBA) show 15% of its mortgage customers have no buffer at all.
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Her advice to borrowers under pressure is to ask their lender for a lower rate before lodging a hardship request, noting that lenders are legally obliged to help customers in difficulty.
For brokers, the repricing adds urgency to fixed rate reviews for clients with thin buffers.
