For millions of Australian homeowners, this Friday marks a stressful milestone. The “floodgates” have officially opened, with the nation’s largest lenders moving in lockstep to pass on the Reserve Bank of Australia’s (RBA) latest 25-basis-point increase to variable mortgage rates.
While the large four banks—ANZ, Commonwealth Bank, NAB, and Westpac—have already locked in their dates to pass on the hike in full, a curious divergence is appearing across the broader lending landscape. More than two dozen lenders, ranging from nimble neobanks to established credit unions, have yet to announce owner-occupier repricing, offering a brief, albeit uncertain, reprieve for a segment of borrowers.
As a former financial analyst, I’ve seen this pattern before. When the RBA moves, the majors typically act as the bellwether, signaling the new cost of capital. However, the delay among smaller and digital lenders often reflects a strategic play for market share. By lagging behind the big banks, these providers can position themselves as the “consumer-friendly” alternative, attracting refinancing borrowers who are desperate to shave a few basis points off their monthly repayments.
The Divide: Who is Hiking and Who is Holding?
The scale of the current shift is significant. According to data from Canstar, approximately 60 lenders have already confirmed they will implement the rate increase. This group is led by the dominant players, including Macquarie Bank, Bankwest, Suncorp, and the various arms of the big four, such as St.George, BankSA, and Bank of Melbourne. Even many mutuals and credit unions, including Bank Australia and Great Southern Bank, have joined the wave.
However, the list of “holdouts” is surprisingly long. The hesitation is most visible among digital-first lenders and non-bank providers who operate with different cost structures or growth targets than the traditional majors.
The lenders yet to issue owner-occupier repricing announcements include:
- Major & International Banks: Citi, HSBC Home Loans, Bank of China, and RAMS.
- Digital & Neobanks: Athena, Up, Unloan, Tiimely Home Loans, WLTH, Yard, Reduce, and Resi.
- Non-Bank Lenders: Pepper Money, Liberty Financial, Firstmac, La Trobe Financial, Better Choice, and Mortgage House, among others.
- Mutuals & Credit Unions: A wide array including Bank of us, BankVic, bcu, Defence Bank, ECU, Gateway Bank, Police Bank, and QBANK.
some lenders, such as Bluestone, Heritage Bank, and People’s Choice Credit Union, have acknowledged that May hikes are coming but have not yet publicized the exact date the increase will hit customer accounts.
| Lender Category | Action Status | Typical Timeline |
|---|---|---|
| Big Four / Major Banks | Confirmed Hike | Immediate (mostly this Friday) |
| Digital / Neobanks | Pending Announcement | Variable / Lagging |
| Non-Bank Lenders | Pending Announcement | Variable / Lagging |
| Select Mutuals | Confirmed / Pending | May through June |
The Broader Economic Pressure
The immediate focus on variable rates obscures a more systemic trend: the rising cost of borrowing across the board. Sally Tindall, Canstar’s data insights director, noted that nine lenders have already lifted fixed rates over the past week. For those currently on fixed terms, the “cliff” is approaching faster than many realize, as they transition to variable rates that are substantially higher than those they locked in two or three years ago.
This movement comes at a time of cautious signaling from the RBA. While Governor Michele Bullock has acknowledged that the risks to inflation are becoming more balanced, she has been clear that further cash rate hikes remain a possibility. The RBA is effectively playing a game of patience, watching how the economy absorbs these increases before deciding if another lever needs to be pulled.
Despite the mounting pressure on household budgets, there is a surprising resilience in the property market. Many analysts feared a sharp correction in housing values as rates climbed. However, evidence suggests that Australian house prices are not “falling off a cliff.” The market has already weathered a global pandemic and a relentless streak of 13 rate hikes throughout 2022 and 2023, suggesting a higher floor for valuations than previously anticipated.
The Next Catalyst: The Federal Budget
As borrowers scramble to adjust their budgets for Friday’s hikes, the financial community is shifting its gaze toward Canberra. The upcoming federal budget is expected to be a pivotal moment for housing policy, specifically regarding tax settings that have long been a point of contention.
Speculation is currently centered on two primary areas: negative gearing and the capital gains tax (CGT) discount. Any adjustment to these rules could significantly alter the incentive structure for property investors, potentially cooling demand in the investment market even as the RBA cools demand through interest rates.
For the average homeowner, the interaction between RBA policy and federal tax policy will determine whether the current housing squeeze is a temporary plateau or the start of a longer-term realignment of the Australian property market.
Disclaimer: This article is provided for informational purposes only and does not constitute financial or investment advice. Readers should consult with a licensed financial adviser regarding their specific mortgage and financial situation.
The next critical checkpoint for borrowers will be the release of the federal budget, which will provide clarity on housing tax settings and government spending levels—both of which will influence the RBA’s future decisions on the cash rate.
Do you think your lender is being fair with the current rate pass-through? Share your experience in the comments below or share this article with a fellow homeowner.
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