Home Loan Rates Hold Fire: What June’s Job Figures Mean for Borrowers in Australia

Australian Home Loan Rates: Lenders Wait and Watch

It’s been ten days since the Reserve Bank of Australia (RBA) surprised many by keeping the cash rate at 3.85% this July. Following this unexpected news, Australian home loan rates have seen very little change. Most lenders are holding back, likely waiting for clearer signals from the central bank.

However, the chances of an August rate cut grew much stronger last Thursday. This was after the June unemployment figure jumped unexpectedly to 4.3%. That’s up from 4.1% in May. The jobless rate has stayed around 4% since early 2024. A strong job market was a key reason the RBA hesitated to cut rates.

Now, things are different. The June figures show the job market is cooling. This is exactly what the RBA wants to see in its ongoing fight against inflation. Some experts even believe the central bank should have cut rates in July. This is especially true after the lower-than-expected May monthly inflation figure of 2.1%.

The RBA will now look closely at its preferred quarterly inflation data. This information is due out on July 30. It will help confirm if the economy is ready for a cash rate cut in August. All four major banks had predicted a July cut. Now, most experts expect a 25-basis point cut when the RBA decides on August 12.

Given this “wait and see” approach, Australian home loan rates are mostly stable this week. Let’s look at one exception.

Summerland Bank Lowers Rates

Despite the general quiet, Summerland, a bank based in the Northern Rivers region of New South Wales, has cut many of its home loan rates this week.

Summerland’s best new rate is 5.09% p.a. (6.18% p.a. comparison rate*). This is for an owner-occupier home loan fixed for two years with a loan-to-value ratio (LVR) of 80% or less. That’s a decent 30-basis point drop. For even lower LVRs (60% or less), the rate falls to a market-leading 4.99% p.a. (6.16% p.a. comparison rate*). Summerland typically offers its best rates for loans with lower LVRs.

The bank has also reduced its Basic Home Loan Special Offer variable rate by five basis points. It’s now 5.49% p.a. (5.54% p.a. comparison rate*) for owner-occupiers with an LVR of 60% or less. For LVRs between 60% and 80%, the rate is 5.59% p.a. (5.64% p.a. comparison rate*).

Summerland is also giving new cashback deals of up to $3,000 for eligible refinancers. This smaller, customer-owned bank is planning to merge with Regional Australia Bank in 2026.

As we move closer to the RBA’s next cash rate decision, the upcoming inflation data will be key. It will likely set the stage for future changes to Australian home loan rates. For more details on the RBA’s role, you can visit the Reserve Bank of Australia website. To learn more about managing your home loan, check out our guide on Understanding Your Mortgage Options.