First home buyers roar into the mortgage market as banks hike rates

The size of an average first home buyer lifted 8.5% in the December quarter to $607,624 - the first signal of the impact of the 5% Deposit Scheme’s expansion on mortgage sizes.

The scheme is now open to an unlimited number of applicants regardless of household income, with significantly higher property price caps.

“This was the largest rise in the number of first home buyer loans since the December quarter 2023, and their value increased by 15.5%,” ABS head of finance statistics Mish Tan said.

But it wasn’t just first home buyers rushing into the market - property investor lending also ticked 5.5% higher.

Property investors once again made up around 40% of new home loan borrowers in the December quarter, borrowing an average of $716,000. 

How the RBA’s February hike could hit borrowers

For those contributing to such growth in loan sizes, the Reserve Bank of Australia’s (RBA’s) February rate hike might have come as a nasty surprise.

Here’s how the hike could impact monthly repayments on an average 30‑year variable loan:

Borrower/ average loan size	Average rate December ‘25	Previous monthly repayment	Assumed average rate post‑RBA hike	New monthly repayment
First home buyer $608,000	5.48% p.a.	$3,445	5.73% p.a.	$3,540
Owner‑occupier $736,000	5.48% p.a.	$4,170	5.73% p.a.	$4,286
Investor $717,000	5.67% p.a.	$4,148	5.92% p.a.	$4,262

Source: ABS Lending Indicators and RBA Lenders’ Interest Rates.

How much could a rate hike cost you? Mortgage Repayment Calculator

Most lenders have now responded to the RBA rate hike

So far the majority of lenders have responded to the RBA’s February rate hike.

CommBank, NAB, and ANZ have moved variable mortgage rates up by 25 basis points for new and existing borrowers as of 13 February. 

Westpac will follow days later on 17 February, while Macquarie will hold off until 20 February. 

Only reverse mortgage provider Heartland Bank has so far chosen not to pass it on, while the merged Unity Bank and G&C Mutual are alone in hiking by more than 25 basis points.

And while variable rate adjustments predictably abound this week, many major market players are also adjusting fixed rates, perhaps indicating what they expect from future RBA meetings.

ANZ lifts fixed rates as much as 50 basis points

The smallest big four bank also moved on fixed rates on Friday morning, lifting its lowest rate fixed offering to 5.79% p.a. (6.56% p.a. comparison rate*) for eligible owner-occupiers fixing for two years.

New fixed rates for owner-occupiers at ANZ include:

Fixed term	LVR	Change	New rate	Comp rate*
One year	≤80%	+40bps	5.89%	6.66%
	80-90%	+40bps	6.34%	6.88%
Two years	≤80%	+35bps	5.79%	6.56%
	80-90%	+35bps	6.24%	6.80%
Three years	≤80%	+40bps	6.04%	6.54%
	80-90%	+40bps	6.49%	6.81%
Four years	≤80%	+20bps	6.09%	6.51%
	80-90%	+20bps	6.54%	6.80%
Five years	≤80%	+35bps	6.24%	6.52%
	80-90%	+35bps	6.69%	6.83%

Meanwhile, property investors might consider these new fixed rates from ANZ:

Fixed term	LVR	Change	New rate	Comp rate*
One year	≤80%	+35bps	5.99%	7.20%
	80-90%	+35bps	6.44%	7.43%
Two years	≤80%	+30bps	5.89%	7.05%
	80-90%	+30bps	6.34%	7.30%
Three years	≤80%	+30bps	6.09%	6.98%
	80-90%	+30bps	6.54%	7.25%
Four years	≤80%	+35bps	6.29%	6.95%
	80-90%	+35bps	6.74%	7.24%
Five years	≤80%	+50bps	6.44%	6.94%
	80-90%	+50bps	6.89%	7.25%

Macquarie hikes fixed rates by 25 basis points

The biggest home loan lender making fixed rate moves this week was Macquarie - marking the fourth time since November it’s adjusted its fixed line up.

Though, this time, its moves appear to be directly in line with the RBA’s February movement. 

It hiked fixed rates across the board by 25 basis points, bringing its lowest fixed rate to 5.84% p.a. for owner-occupiers with loan-to-value ratios (LVRs) of 70% or less, fixing for one year:

Fixed term	LVR	Change	New rate	Comp rate*
One year	<70%	+25bps	5.84%	5.41%
	70-80%	+25bps	5.89%	5.46%
	80-95%	+25bps	6.89%	6.47%
Two years	<70%	+25bps	5.94%	5.48%
	70-80%	+25bps	5.99%	5.53%
	80-95%	+25bps	6.99%	6.53%
Three years	<70%	+25bps	5.99%	5.54%
	70-80%	+25bps	6.04%	5.59%
	80-95%	+25bps	7.04%	6.60%
Four years	<70%	+25bps	6.04%	5.61%
	70-80%	+25bps	6.09%	5.66%
	80-95%	+25bps	7.09%	6.67%
Five years	<70%	+25bps	6.14%	5.71%
	70-80%	+25bps	6.19%	5.76%
	80-95%	+25bps	7.19%	6.77%

ING lifts mortgage rates by up to 25 basis points

Joining Macquarie in lifting fixed rates was ING, which hiked much of its fixed line up by 20 basis points. 

The lowest fixed rate offered by the Dutch-owned bank is now 5.84% p.a. (5.69%-5.71% p.a. comparison rate*), offered to owner-occupiers with LVRs of 80% or less fixing for one or two years.

ING was among the first to lift variable rates following the RBA’s hike, moving for new and existing borrowers on Tuesday, 10 February. 

It now advertises variable rates starting from 5.64% p.a. (comparison rates from 5.67% p.a.). 

Customer-owned giants make fixed rate moves 

Both Newcastle Permanent and Great Southern Bank, two of Australia’s largest customer-owned banks, also lifted fixed rates this week.

The following changes were made to Newcastle Permanent’s basic fixed line up for owner-occupiers, which includes special rates:

Fixed period	LVR	Change	New rate	Comp rate*
One year	<80%	+10bps	5.69%	7.57%
	>80%	+10bps	5.79%	7.58%
Two years	<80%	+25bps	5.54%	7.34%
	>80%	+25bps	5.64%	7.36%
Three years	<80%	+20bps	5.69%	7.19%
	>80%	+20bps	5.79%	7.22%
Four years	<80%	+20bps	5.89%	7.10%
	>80%	+20bps	5.99%	7.13%
Five years	<80%	+25bps	5.94%	6.98%
	>80%	+25bps	6.04%	7.03%

Meanwhile, Great Southern Bank lifted some of its fixed rates by up to 51 basis points.

The following changes were made to its owner-occupier fixed rate line up, available to borrowers with LVRs of up to 95%:

Fixed period	Change	New rate	Comp rate*
One year	+25bps	5.99%	7.18%
Two years	+51bps	6.10%	7.08%
Three years	+51bps	6.10%	6.98%
Five years	+31bps	6.25%	6.87%

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