I recently attended a CBA luncheon where their Head of Markets & Strategy shared an in-depth look at what’s happening across lending, inflation and global markets. It was a timely session, and while a lot of insights were shared, one message really stood out.
Longer-term debt is likely to become more expensive.
There are a few drivers behind this. The global environment remains unpredictable, with the US facing political uncertainty and various geopolitical conflicts continuing to influence financial markets. When uncertainty rises, lenders typically price in more risk, and that tends to show up in longer-term borrowing costs first. What makes this environment interesting is that, at the same time, the market still expects short-term rates to stabilise. So while the cash rate may not shift significantly in the near term, the longer end of the curve is already adjusting. It’s a reminder that even when our local conditions appear steady, global pressures can change the landscape quickly.
We’re also seeing this reflected in the Australian lending environment. Over the past couple of weeks, several lenders have begun adjusting fixed-rate products upward after more than a year of relative stability. These movements aren’t dramatic, but they’re meaningful, and they signal a shift in where banks believe long-term funding costs are heading.
Here’s where current lending rates sit across the major categories:
Residential Lending
• Owner Occupier P&I: 5.34–5.39%
• Owner Occupier IO: 5.69–5.74%
• Investment P&I: 5.53–5.59%
• Investment IO: 5.64–5.79%
These ranges are still competitive, but any upward pressure at the fixed end is worth paying attention to, particularly for borrowers approaching the end of their current term or considering a change in structure.
Commercial Lending
• Fully secured commercial loans: 6.15–6.35%
Lenders remain supportive of well-secured commercial deals, although pricing is tightening slightly as global conditions influence local credit appetite.
Business Lending
• Unsecured loans: starting from 11.99%
• Working capital (fully secured): 7.35–7.50%
The gap between secured and unsecured lending continues to widen, reflecting higher risk pricing and cautious lending settings in the current environment.
With short-term rates relatively stable but longer-term pressures building, it’s a good time to review your lending position. Even small shifts in lender pricing can influence long-term affordability and cashflow planning. Borrowers may want to revisit their fixed versus variable split, explore refinancing opportunities, or consider how upcoming lending requirements may be affected over the next 12 to 24 months. Sound planning now can help reduce uncertainty later, especially as global markets continue to shift.
If you’re looking for a clearer picture of how these changes might affect your borrowing or future plans, reach out to the HTA Finance team. We’re here to help make the path forward simple and informed.
