The cheapest variable home loan rate in the country is now 5.89%, and three lenders are charging it, regardless of loan-to-value ratio. That headline number sits awkwardly beside the rest of the week’s data, where 26 lenders pushed up 182 variable products by about 0.24 percentage points on average.
Read together, the two facts tell you something useful. Even the sharpest pricing in the market has been dragged upward by the Reserve Bank’s latest increase. The floor moved with everything else.
Why a three-way tie matters less than the gap behind it
A tie at the bottom suggests several lenders have landed on the same view of how low they can go. It does not tell you how far the average borrower sits from that figure. That gap is where the money is.
The comparison data puts 19 rates in the database below 6%. In a market with this many products, that is a thin slice. Most borrowers are on rates above the headline floor, and some are well above it.
If your loan was priced when you signed up and has only moved when the cash rate moved, the cheapest rate in the market is likely a long way from yours. That distance is the loyalty tax, and it widens each time lenders lift rates faster than they reward existing customers.
Key numbers
- Cheapest variable rate: 5.89%, shared by three lenders
- Variable rates raised: 182 products across 26 lenders, about 0.24 points on average
- Fixed rates: 56 lifted by roughly 0.21 points, only six cut by around 0.18 points
- Rates under 6%: 19 in the comparison database
How much of the cash rate path is already in the price
Lenders do not wait for the central bank to move before they price. The cheapest loans tend to reflect where the cash rate is expected to go, not just where it is today.
That is why the jobs data matters here. Unemployment rising to 4.7% sits above the 4.5% the Reserve Bank had pencilled in for the final three months of the year. A softer labour market weakens the argument for another increase in 2026 and points toward a hold at the next meeting, two weeks away.
If markets are leaning toward a hold, the lowest advertised rates are unlikely to keep climbing at the same pace. But a hold is not a cut. It leaves rates where they are, and the gap between the cheapest and typical loan stays put too.
The fixed side is telling a different story
Fixed pricing is moving in the same direction, with 56 rates lifted against only a handful trimmed. Fixed rates carry a lender’s view of the future. When they rise alongside variable rates, lenders are not pricing in cuts soon.
That should temper any plan to wait for a drop before acting. Waiting costs you the difference between your current rate and the best available, every month.
What the spread means for a refinance decision
The practical question is not whether 5.89% is a good rate. It is whether you are paying materially more than you need to.
A reasonable approach:
- Check your current rate against the cheapest products at your loan size and LVR.
- Ask your lender to reprice before you leave. A call is worth making, though it does not always work.
- If they refuse, price the full cost of switching: discharge fees, application fees and any cashback conditions.
- Weigh the saving over a realistic holding period, not just the first year.
The cheapest rate may not be available to every borrower. Rankings can also shift, because some lenders have yet to pass on the latest increase in full. A lender sitting at the top today may not be there by the time you apply.
A repayment change borrowers may overlook
Rate is only one lever. Some customers moving between lenders next year will find that their loan terms change even if the rate does not. Minimum monthly repayments can rise under a different calculation method, and borrowers who have been making extra payments feel it most.
They can usually ask to revert to the old calculation, but that comes at the cost of a longer repayment period. It is a trade-off worth understanding before you accept a transfer.
For wider context on how lenders, refinancing and loan structures fit together, see our home loans, lenders and refinancing guide. If you are worried about how repayments are tracking against income, our look at mortgage arrears risk as repayments hit 50.9% of income is a useful companion.
What I would watch before acting
Two things will move this picture quickly: the next Reserve Bank decision, and whether the lenders that have not yet passed on the hike do so. If either lifts the floor, the case for moving sooner rather than later gets stronger.
The cheapest rate is a reference point, not a promise. What matters is the distance between it and your own loan, and whether that gap is costing you more than a refinance would.
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General info, not financial advice.
