Key points
  • The RBA chose to keep the cash rate at 4.35% on Tuesday
  • Banking giant Macquarie lifted fixed interest rates in the wake of the decision
  • Bank Australia and Teachers Mutual Bank also shook up their home loan rates 
  • Meanwhile, Great Southern Bank edited its variable rate lineup this week

The central bank board's May meeting was closely watched by mum-and-pop borrowers and economic enthusiasts alike amid speculation the cash rate could be hiked.

Such speculation came to the forefront on the back of the March quarter's inflation upside.

However, to the shock of many commentators, the RBA board didn't even return to its hawkish bias following the meeting, saying inflationary wobbles are to be expected going forward.

Those looking for a new home loan or considering refinancing didn't have much to celebrate, though.

Despite a cash rate hike being wiped from the table for now, many banks and lenders upped their own advertised rates this week.

That might suggest that product teams are expecting rates to be on hold for longer than they may have previously, leaving them to reprice their fixed offerings.

Macquarie was among those increasing home loan interest rates, as were some notable customer-owned bank brands.

So, what's new in the home loan market? Let's take a look.

Macquarie Bank hikes fixed mortgage rates

Not-quite-big-four-bank Macquarie increased the rates offered to borrowers looking to fix this week, lifting them by as much as 26 basis points.

Changes were made to the lineup for those paying principal and interest (P&I), interest only (IO), investing in property, or living in their abode.

The move comes just two weeks after the investment banking giant dropped variable rates for its retail consumers.

For owner-occupiers with a loan-to-value ratio (LVR) of between 70% and 80%, these changes might be worth considering:

Product Change New rate (% p.a.) Comparison rate* (% p.a.)
One year fixed +26bp 6.75% 6.27%
Two years fixed +24bp 6.39% 6.25%
Three years fixed +26bp 6.35% 6.26%
Four years fixed +24bp 6.49% 6.32%
Five years fixed +24bp 6.49% 6.35%

Mutual banks hike fixed home loan rates

It wasn't just publicly owned banking giants hiking fixed home loan rates either.

Bank Australia increased many of its rates for owner-occupiers paying P&I by 15 basis points, with changes to its basic products including:

Product Change New rate (% p.a.) Comparison rate* (% p.a.)
One year fixed ≤80% LVR +15bp 6.24% 6.20%
Two years fixed ≤80% LVR +15bp 6.14% 6.50%
One year fixed ≤90% LVR +15bp 6.44% 6.72%
Two years fixed ≤90% LVR +15bp 6.34% 6.70%

Meanwhile, Mutual bank headliner Teachers Mutual Bank and subsidiaries Firefighters Mutual Bank, Health Professionals Bank, and UniBank joined the action.

The group increased the offered rates on many of its Your Way Plus home loan products by as much as 80 basis points.

The Your Way Plus product offers an offset account not provided with the bank's simpler Your Way product.

Speaking of, the fixed rates offered on the You Way product were actually dropped this week.

Owner-occupiers paying P&I repayments might consider these newly reduced rates:

Product Change New rate (% p.a.) Comparison rate* (% p.a.)
Your Way, two years fixed -20bp 6.29% 6.31%
Your Way, three years fixed -15bp 6.24% 6.30%
Your Way, four years fixed -25bp 6.34% 6.34%
Your Way, five years fixed -30bp 6.39% 6.37%

Great Southern Bank hikes variable home loan rates too

Finally, for borrowers considering a new mortgage product, customer-owned Great Southern Bank brought apparent bad news this week.

It upped certain fixed and variable rates offered to new borrowers by as much as 25 basis points.

The bank's Basic Variable rate, for those making P&I repayments with an LVR of 70%-80%, was increased by 5 basis points to 6.24% p.a. (6.30% p.a. comparison rate*).

Other movers

  • MyState Bank lifted fixed interest rates by up to 30 basis points
  • Sovereign NZ dropped fixed mortgage rates by as much as 10 basis points

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Brooke Cooper
Brooke Cooper
Finance Journalist

Brooke Cooper joined the InfoChoice Group in 2023. She previously wrote for the Motley Fool, covering topics such as share prices, companies, and IPOs. With interests in everyday finance and wealth, Brooke is passionate about educating Aussies - especially young adults - on all things money.

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