Borrowers holding out for another rate cut anytime soon may have to reconsider their expectations, as Australia’s banks appear to have already priced in where the cash rate is heading — and the outlook isn’t promising.

In recent weeks, several lenders have made pre-emptive moves by raising interest rates on a range of loan products, even before the RBA delivered its final cash rate decision of the year.

In total, eight banks have increased rates on at least one owner-occupier fixed home loan over the past week. Only one lender has gone the other direction, trimming rates on certain variable loans for new customers.

When banks lift their fixed rates, it generally signals their view that the rate-cut cycle has ended — or is very close to ending. With this expectation, lenders feel less pressure to offer heavily discounted fixed loans, since variable rates are unlikely to fall much further.

According to Canstar’s monitoring, the banks that raised fixed rates include Macquarie Bank, Greater Bank, Newcastle Permanent, Bankwest, Pacific Mortgage Group, Police Bank, Queensland Country Bank and Suncorp.

The new average short-term fixed rate for owner-occupiers now stands at 5.10%.

The lowest current rate is 4.74% from Australian Mutual Bank for both two- and three-year terms. Pacific Mortgage Group follows with 4.84%, the lowest available for one-year terms.

For borrowers wanting longer-term certainty, the best four-year fixed rate is 5.24%, offered by Firefighters Mutual, Health Professionals Bank, Teachers Mutual Bank, UniBank and Freedom Lend.
Australian Mutual Bank leads again for five-year terms with a 5.19% fixed rate.

In contrast, some lenders are beginning to discount variable products to attract new customers before rates eventually climb again.
P&N Bank is the only lender to cut variable rates recently, targeting specific owner-occupier products.

The average variable rate now sits at 5.51%.

Geelong Bank currently advertises the lowest variable rate at 4.99%, followed by in1Bank at 5.08%.

Pacific Mortgage Group, People’s Choice, RACQ Bank, Heritage Bank, Mortgage House, Australian Mutual Bank and Freedom Lend all sit at 5.14%, while Bank of China offers 5.18%.

Rates of 5.19% are being offered by unloan, Qudos Bank, The Mutual Bank, Greater Bank, Northern Inland Credit Union, The Capricornian, Queensland Country Bank, Virgin Money and NRMA Insurance.

Overall, the message is clear: banks often move independently of the RBA, and their pricing decisions can shift before official policy does. Borrowers should stay alert to lender behaviour and take charge of their own financial position by actively monitoring market changes.