Home Loan Interest Rates
Australia, May 2026

As of 4 May 2026, big-four owner-occupier variable rates sit around 5.74% to 5.99% p.a. for principal-and-interest loans below 80% LVR. Investor and interest-only rates are typically 0.30 to 0.50 percentage points higher. Several non-bank lenders price below the big four, with rates from around 5.39% p.a. for the lowest-risk borrowers.

The Reserve Bank of Australia raised the cash rate to 3.85% in February 2026 after holding it through most of 2025. The hike reflected stronger-than-expected inflation in late 2025. The big four passed on the full 25 basis-point increase to variable home loans within two weeks. Read our blog for the latest RBA decision analysis.

The cash rate is what banks charge each other for overnight lending. When it moves, banks generally pass changes through to variable home loan rates within one to four weeks, although they retain discretion to pass on more, less, or none of any change. Fixed-rate pricing is influenced by the cash rate but is set primarily by wholesale funding markets (the swap rate curve) and so can move independently.

Depends on your view of where rates are headed and your appetite for repayment certainty. Fixing locks in a rate for a set period (typically 1–5 years), protecting you against further rises but limiting flexibility (no extra repayments above the cap, break costs if you exit early). If you want certainty for budgeting and you believe rates may rise further, a 2 or 3-year fix is often the right call. Read our fixed-vs-variable explainer for a full breakdown.

Three levers: (1) negotiate, lenders routinely give 0.20–0.50 pp discounts off carded rates to customers who ask, especially refinancers; (2) compare beyond the big four, non-bank lenders frequently price 0.30–0.60 pp below; (3) keep LVR below 80%, lenders price-tier by LVR and the difference between 80% and 60% can be 0.10–0.30 pp.

The interest rate is what's charged on the loan balance. The comparison rate folds in most fees (establishment, ongoing, discharge) and is calculated on a standard $150,000 loan over 25 years for owner-occupier loans. It exists so you can compare apples-to-apples across lenders, since a low rate paired with high fees can be more expensive than a higher rate with no fees.

Yes, typically by 0.30 to 0.50 percentage points. APRA imposes higher capital requirements on investor loans because they carry higher risk during downturns. Interest-only loans (almost always investor) are higher again, often 0.20 to 0.40 pp above investor P&I.

At least every six months. The variable rate market is competitive enough that lenders rarely give existing customers their best price unprompted. A 0.30 pp drop on a $600,000 loan is about $1,000 a year in savings, often achievable with a five-minute call to your lender.