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 23 November 2024 Important disclosures and comparison rate warning*

Refinance home loan comparisons on Mozo

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  • 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.

  • Fixed Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <95%
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.28 % 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.

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    5.74 % p.a.
    Fixed 3 years
    Comparison rate
    6.81 % p.a.
    Initial monthly repayment
    $2,915

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

  • 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.

  • 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.

  • Mortgage Simplifier

    • LVR<80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • Elevate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.18 % p.a.
    Variable
    Comparison rate
    6.18 % p.a.
    Initial monthly repayment
    $3,056

    Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.

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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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