RBA rate hike pushes mortgage costs up

The Reserve Bank of Australia lifted its key rate to the highest level in fifteen years. The average variable mortgage rate for owner-occupiers will reach six point four nine percent once Tuesday's increase is passed on.

Switching banks could save hundreds monthly

Some banks are offering rates close to six percent. Switching from the average rate to a lower rate would represent a one hundred eighty dollar cut to monthly repayments for someone with a six hundred thousand dollar loan with twenty five years left.

Westpac offers lowest rate among big four

Among the big four banks, Westpac is offering the lowest variable rate at six point two four percent, according to comparison platform Canstar. Dozens of smaller lenders are offering lower rates than the big four.

Record refinancing but discounts shrinking

A record sixty five billion dollars worth of external refinancing occurred in the first half of twenty twenty six. But experts warn it's getting harder to find big discounts as banks become less willing to offer better rates.

Haggle hard or you won't get a discount

Sally Tindall, Canstar's director of data insights, says borrowers have a better chance of convincing their bank if they talk tough about leaving. Get a competitor offer and be prepared to ask for a mortgage discharge form, she says.

“If you really want to put your best haggling foot forward, get yourself prepared, with a competitor offer, and be prepared to ask for a mortgage discharge form.”

Falling prices lock borrowers out

Falling house prices mean a growing number of Australians will be locked out from refinancing because they don't have adequate borrowing capacity. The share with loan to value ratios above eighty percent has risen this year.

Mortgage prison above eighty percent LVR

Sebastian Watkins, chief executive of broking group Aussie, says borrowers with loan to value ratios above eighty percent are in mortgage prison. Once you push above eighty percent, the door to a competitive refinance can start to slam shut, he says.

“As values fall, loan-to-value rates rise [and] once you push above 80%, the door to a competitive refinance can start to slam shut.”

Wait weeks to see true market rates

More than forty lenders have announced new rates since the RBA decision, but many will wait to publicly announce or avoid publicising entirely. Waiting a few weeks lets borrowers judge whether a rate will lift after the hike or stay discounted.