Lenders lift 338 home loan rates as cheaper mortgage options disappear

Australian mortgage rates are being repriced at speed, with 338 home loan increases recorded across one week as lenders respond to the Reserve Bank’s latest cash rate rise and changing wholesale funding costs.

Canstar data reported by realestate.com.au on Thursday showed 17 lenders increased 289 fixed rates by an average of 0.24 percentage points. Seven lenders also raised 49 variable rates, producing 338 increases across owner-occupier and investor products.

The repricing followed the Reserve Bank’s September decision to lift the cash rate to 4.60 per cent. Many lenders had not yet announced their full response when the figures were compiled, suggesting further changes could still reach borrowers during October.

The immediate issue is not only that repayments are rising. The range of cheaper loans is shrinking, which may make it harder for existing borrowers to refinance their way to a meaningful saving.

Cheap variable loans are becoming scarce

Canstar’s database showed only two variable rates below 5.75 per cent at the time of the report. Its current comparison service, updated on Friday, displayed rates from 5.69 per cent, although the rate available to an individual borrower depends on factors including deposit size, loan amount, repayment type and property use.

Lenders lifted fixed rates much more widely than variable rates during the measured week. Fixed pricing reflects expectations about future funding costs as well as the current cash rate, so these changes indicate banks are protecting themselves against the possibility that borrowing conditions stay tighter for longer.

For buyers, a rate quoted during early property research may therefore be gone by the time finance approval, contract exchange or settlement occurs. Pre-approval is also not necessarily a guarantee that the original rate will be retained.

Borrowers should check the actual product rate, comparison rate, fees and repayment before making an offer. A loan that remains available may still have been repriced since a broker or lender first prepared an estimate.

Repayment pressure is accumulating

The Thursday report calculated that four cash rate increases during 2026 had added about $364 a month to repayments on a $600,000 loan compared with January. The estimated increase was $454 a month on a $750,000 loan and $606 on a $1 million balance.

Those figures illustrate the cumulative effect of rate changes rather than the cost of the latest rise alone. Household budgets that absorbed the first increase may now have less capacity to handle the later ones, particularly where insurance, council rates and other housing costs have also risen.

Higher mortgage rates can also change a buyer’s maximum loan and the price range supported by a lender’s serviceability assessment. Buyers with an older pre-approval should have it checked before bidding, because the amount they can borrow may have fallen even if their income and deposit have not changed.

Sellers face a related risk. A purchaser who appeared well financed at the start of a campaign may be working with a smaller budget by auction day. Longer finance clauses and more conservative offers are likely where borrowers are uncertain about their final rate.

Refinancing needs a fresh calculation

A lower advertised rate does not automatically make refinancing worthwhile. Discharge fees, application costs, valuation fees, cashback conditions and the risk of restarting a long loan term all need to be included.

Borrowers considering a fixed loan should also compare the certainty of fixed repayments with restrictions that may apply to extra repayments, redraw facilities or early exits. The large number of recent fixed-rate increases means comparisons completed even a week earlier may now be outdated.

What it means for you

• Buyers should have their borrowing limit and repayment estimate refreshed before making an offer.
• Existing borrowers should compare rates again, but include switching costs and the remaining loan term.
• Sellers should allow for tighter finance conditions when assessing offers.
• Anyone approaching settlement should confirm the rate that will actually apply, not rely on an earlier advertisement.