Big Four Banks hike home loan interest rates despite RBA Pause, so is now a good time to refinance?

By Evlin DuBose · · 2 min read
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Collage of a refinancer thinking about her mortgage.

Despite the April RBA pause, Westpac and CBA have raised interest rates on several home loan offerings. While the increases are relatively small compared to the 0.25% and 0.50% hikes that have become the norm in the last 11 months, they still indicate the banks expect rates will stay higher, or go higher, in the next few months.

Westpac and CBA make home loan rate changes in April

Collage of a woman looking up at blue rising graph lines of changing interest rates on mortgages.

Last week, Commonwealth Bank lifted the variable interest rates on a few of its Standard Variable Rate (Wealth Package) tiers, each between 10 and 12 basis points. 

CBA Standard Variable Rate Home Loan (Owner-Occupied, P&I, Wealth Package) rate changes - 14 April 2023

LVRChangeNew Rate
< 60%
10 bp
5.44% p.a. (5.82% p.a. comparison rate*)
< 70%12 bp5.54% p.a. (5.92% p.a. comparison rate*)
< 80%12 bp5.64% p.a. (6.03% p.a. comparison rate*)

This packaged home loan is among CBA’s lowest rate offers at the moment. 

Westpac made similar increases to its Flexi First Option Home Loan Special Offer, its most competitive home loan product in the Mozo home loan database. The new rates are as follows:

Westpac Flexi First Option Home Loan Special Offer (Owner-Occupied, P&I) rate changes - 13 April 2023

LVRChangeNew Rate
< 70%
10 bp5.64% p.a. (5.57% p.a. comparison rate*)
70% - 80%10 bp5.74% p.a. (5.67% p.a. comparison rate*)
> 80%10 bp6.04% p.a. (5.97% p.a. comparison rate*)

Variable rates are sensitive to cash rate changes, hence RBA rate movements have skyrocketed home loans over the last year. However, incremental changes like this despite no official rate changes indicate that banks may expect further hikes on the horizon.

Indeed, RBA governor Philip Lowe stated in his post-decision media address that further tightening measures may be necessary to cool inflation. Westpac and CBA have speculated that the RBA may have at least one more 0.25% top-up in store, which would bring the final cash rate to 3.85% in either May or June. 

So how does this impact refinancers? 

For those comparing variable interest rates, Mozo banking expert Peter Marshall warns not to hold your breath for meaningful drops anytime soon. 

“Variable rates will just follow whatever the RBA does,” explains Marshall. “So if there’s one more increase, then variable rates will go up again.”

Fixed-interest home loans, on the other hand, give us a wider view of home loan costs. 

“Fixed rates look to the future,” says Marshall. “For fixed rates, the pattern is generally that banks are increasing shorter one to three-year terms and decreasing four and five-year terms.”

Those decreases could point to a lower cash rate in a few years to come. So while we may not have hit the peak of the rate cycle, we’re likely very near it. 

Compare refinancing rates for home loans below.

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Last updated 16 December 2024 Important disclosures and comparison rate warning*
What are your home loan needs?

Your loan-to-value ratio (LVR): 50%

Loan amount and LVR will affect interest rates.

  • Promoted

    Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Promoted

    Variable Home Loan 90

    • Principal and Interest
    • LVR <90%
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.06 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

  • Promoted

    Budget Home Loan

    • LVR <80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.07 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Enjoy a discounted variable home loan from IMB. Get up to $4,000 cashback (T&Cs apply). Life-of-loan discount off IMB’s standard variable interest rate. Unrestricted additional repayments. Free Internet and Mobile Banking redraws (T&Cs apply). No monthly fees to pay. Up to a 30 year loan term. Split loan available. No offset account.

  • Promoted

    Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Promoted

    Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    5.89 % p.a.
    Fixed 1 year
    Comparison rate
    6.30 % p.a.
    Initial monthly repayment
    $2,867
    Go to site

    Lock in a competitive fixed interest rate and enjoy peace of mind for the fixed period with SWS Bank’s Optimum Fixed Rate Home Loan.There are no application, ongoing or banking fees to pay and first home buyers and refinancers can apply with a speedy online application. Get the flexibility of loan split options and redraw facility. No offset account available for fixed rate proportion of loan. Other fees may be applicable. T&Cs apply.

  • Optimum Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <80%
    Interest rate
    5.89 % p.a.
    Fixed 1 year
    Comparison rate
    6.30 % p.a.
    Initial monthly repayment
    $2,867
    Go to site

    Lock in a competitive fixed interest rate and enjoy peace of mind for the fixed period with SWS Bank’s Optimum Fixed Rate Home Loan.There are no application, ongoing or banking fees to pay and first home buyers and refinancers can apply with a speedy online application. Get the flexibility of loan split options and redraw facility. No offset account available for fixed rate proportion of loan. Other fees may be applicable. T&Cs apply.

  • Fixed Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <95%
    Interest rate
    5.69 % p.a.
    Fixed 2 years
    Comparison rate
    6.34 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    Get the security of a competitive fixed rate home loan for 2 years with IMB. Get up to $4,000 cashback (T&Cs apply). Up to 12 months repayments in advance without penalties. Free Internet and Mobile Banking redraws (T&Cs apply). Up to a 30 year loan term. Split loan available. No offset account.

  • Flex Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.79 % p.a.
    Fixed 2 years
    Comparison rate
    6.27 % p.a.
    Initial monthly repayment
    $2,931
    Go to site

    Competitive Fixed rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Variable Home Loan 90

    • Principal and Interest
    • LVR <90%
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.06 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Affordable home loan rate for buyers or refinancers. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 10% deposit required.

  • Budget Home Loan

    • LVR <80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.04 % p.a.
    Variable
    Comparison rate
    6.07 % p.a.
    Initial monthly repayment
    $3,011
    Go to site

    Enjoy a discounted variable home loan from IMB. Get up to $4,000 cashback (T&Cs apply). Life-of-loan discount off IMB’s standard variable interest rate. Unrestricted additional repayments. Free Internet and Mobile Banking redraws (T&Cs apply). No monthly fees to pay. Up to a 30 year loan term. Split loan available. No offset account.

  • Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Flex Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.33 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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