Sub-5.75% deals are already scarce on Canstar's database
Banks are ramping up efforts to win over rivals' customers with rate cuts, even as one lender's move to lift fixed rates suggests the Reserve Bank could act as early as this month.
Sally Tindall (pictured), Canstar's data insights director, said the trend reflects a wider shift in how lenders are jockeying for new business.
"The property downturn continues to put pressure on lenders to bring in new business and the easiest way for them to do this right now is to coax customers from other banks' books. It's a perilous game of musical chairs, but a fantastic outcome for those existing borrowers who capitalise on the market fragility," Tindall said.
That "market fragility" is borne out in the latest housing figures. Cotality data released last week recorded a fifth straight month of falling national home values, while APRA figures showed the smallest rise in the mortgage market in three years — including a pullback in NAB's residential mortgage book, its first decline since July 2024.
Cuts outweigh hikes, for now
Against that backdrop, eight lenders trimmed 33 owner-occupier and investor variable rates by an average of 0.15 percentage points this week, while four lenders cut 36 fixed rates by an average of 0.29 percentage points.
The average variable rate for owner-occupiers paying principal and interest now sits at 6.61%, with the lowest available rate for any LVR at 5.69%, offered by Pacific Mortgage Group. Only two rates on Canstar's database currently sit below 5.75%, a figure that has held steady.
Tindall noted the cuts are continuing even as other signals point the opposite way.
"Recent data might be pointing to rate hikes, yet new customer cuts keep rolling in. Eight lenders cut a total of 33 new customer variable rates as the slowdown in the property market pressures banks' bottom lines," she said.
Hike speculation still simmering
Not every lender moved in the same direction. Just today, Macquarie Bank hiked fixed rates by up to 0.30 percentage points, in a sign the bank thinks the next move from the RBA could be up.
"A hike is waiting in the wings. The question is, will it materialise and when? At this stage, you would not rule out this month," Tindall said.
With sub-5.75% rates now scarce on Canstar's database, brokers may find the window for locking clients into today's cheapest deals narrowing fast.
