Unwanted Christmas gift: Home loans rise just before Christmas

Aussies are being slugged with an unwanted Christmas gift of higher home loan repayments, fresh figures show.

Aussie mortgage holders are receiving an unwanted Christmas gift of higher interest rates as major financial institutions lift both fixed and variable rates.

Canstar data shows rates are going up even though the Reserve Bank of Australia held the official cash rate in December.

Canstar data insights director Sally Tindall said it appeared the fixed-rate cutting cycle was on hold for now but flagged it could pick up in the new year, giving homeowners much-needed mortgage relief.

Interest rates are rising despite the RBA holding Australia’s official cash rate. Picture: NewsWire / Nicholas Eagar

“The second last full week before Christmas was dominated by fixed and variable rate hikes, with the Teachers Mutual Group, which includes Uni Bank, Health Professionals and Firefighters Mutual, hiking key new customer variable rates by 0.10 percentage points,” she said.

The biggest rate hike came from Newcastle Permanent, which lifted fixed rates by 0.20 per percentage points.

The data shows just one financial institution has cut rates before Christmas.

“Just Queensland Country Bank cut variable rates, while there were no lenders cutting fixed rates – a rare anomaly in a year that has been driven by fixed-rate cuts,” Ms Tindall said.

The changes in interest rates now mean there are 178 rates below 5.75 per cent still on the market, down from 192 the week prior.

These rate changes come just a week after the RBA kept Australia’s official cash rate on hold for the ninth time in a row.

The average variable interest rate for owner-occupiers paying principal and interest is 5.84 per cent.

The lowest variable rate for any loan to value is the 5.69 per cents offered by Australian Mutual Bank.

At the same time, two term-deposit providers hiked six rates by an average of 0.17 per cent, while six providers cut rates on their 15 collective products by an average of 0.13 per cent.

RBA governor Michele Bullock and her board held rates at 4.35 per cent. Picture: NewsWire / Jeremy Piper

The Reserve Bank has held the official cash rate at 4.35 per cent, flagging Australia’s trimmed mean inflation remains above its target range of 2 to 3 per cent.

In a statement released after last Tuesday’s announcement, the board flagged underlying inflation still remained too high.

“Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance,” the board said.

“Measures of underlying inflation are around 3.5 per cent, which is still some way from the 2.5 per cent midpoint of the inflation target.”

Canstar says the impact of a 0.25 per cent cash rate cut could reduce monthly repayments for a $600,000 loan over 30 years by $101 down to $3984.