Average Mortgage Interest Rate in Australia
The average mortgage rate in Australia is 5.98% p.a. for owner occupiers with an existing home loan. The average rate is currently lowest on fixed rate loans.
It’s safe to say mortgage rates in Australia have been on a rollercoaster this year. The Reserve Bank of Australia lifted the cash rate three times earlier this year, before leaving it unchanged at its June meeting. Experts predict interest rates will either move higher or stay the same for the rest of 2026. The cash rate currently sits at 4.35%.
What’s the average mortgage rate in Australia in 2026?
The average mortgage rate on existing owner occupier home loans is 5.98% p.a. This is the average interest rate currently being paid by existing mortgage holders, not the average rate being offered to new borrowers. It's based on the RBA's lending indicators, which track the average interest rates actually paid by Australian borrowers across banks and other authorised lenders.
Currently, the lowest average interest rate recorded by the RBA is 5.47% p.a., on existing short-term fixed-rate home loans (three years or less). Many homeowners locked in a fixed rate before or during the RBA's series of rate hikes this year and are now paying less in repayments than the average variable-rate borrower.
The average short-term fixed rate is 0.53 percentage points lower than the average variable rate of 6.00% p.a. On a $700,000 home loan over 25 years, that's equivalent to a saving of $224 per month in repayments compared with paying the average variable rate.
The average interest rate on longer-term fixed-rate home loans for existing borrowers is 6.06% p.a.
Average home loan rates for existing customers (owner occupier)
| Product | Interest rate |
|---|---|
| Existing owner occupier loans (*Includes loans at variable and fixed interest rates) | 5.98% p.a. |
| Variable rate owner occupier loans | 6.00% p.a. |
| Fixed rate owner occupier loans (1-3 years) | 5.47% p.a. |
| Fixed rate owner occupier loans (> 3 years) | 6.06% p.a. |
| Interest-only owner occupier loans | 6.59% p.a. |
| Principal & interest owner occupier loans | 5.95% p.a. |
Source: Reserve bank of Australia April 2026.
Average home loan rates for new customers (owner occupier)
The average mortgage rate on new owner occupier home loans is 5.98% p.a. Interestingly, this is the same as the average rate currently being paid by existing borrowers, despite lenders typically offering their best home loan rates to attract new customers.
The lowest average interest rate recorded by the RBA on new owner occupier home loans is 5.90% p.a., on short-term fixed-rate loans with terms of three years or less. While the gap is narrow, that's still 0.09 percentage points lower than the average variable rate for new owner occupier home loans (5.99% p.a.).
On a new $700,000 home loan over 25 years, that could save borrowers $38 per month in repayments compared with taking out a variable-rate home loan at the average market rate.
Longer-term fixed-rate home loans (with terms of more than three years) have a higher average interest rate of 6.33% p.a. This reflects lenders pricing in greater uncertainty about the interest rate outlook over a longer fixed period.
| Product | Interest rate |
|---|---|
| New owner occupier loans (*Includes loans at variable and fixed interest rates) | 5.98% p.a. |
| Variable rate owner occupier loans | 5.99% p.a. |
| Fixed rate owner occupier loans (1-3 years) | 5.90% p.a. |
| Fixed rate owner occupier loans (> 3 years) | 6.33% p.a. |
| Interest-only owner occupier loans | 6.71% p.a. |
| Principal & interest owner occupier loans | 5.92% p.a. |
Source: Reserve bank of Australia April 2026.
What’s the average mortgage rate on investor loans?
The average mortgage rate on existing investor home loans is 6.21% p.a. This is around 0.23 percentage points higher than the average rate paid by existing owner occupier borrowers (5.98% p.a.), reflecting the higher pricing lenders typically apply to investment lending.
The broader trends are similar for existing investor loans as they are for owner occupier loans. Existing short-term fixed rates (one to three years) average 5.53% p.a., which is 0.71 percentage points lower than the average variable investor rate of 6.24% p.a.
By comparison, existing investor loans fixed for more than three years have an average interest rate of 6.47% p.a., 0.94 percentage points higher than the average rate on one- to three-year fixed loans.
The average interest rate on existing interest-only investor loans is 6.33% p.a., compared with 6.15% p.a. for existing principal and interest investor loans — a premium of 0.18 percentage points.
| Product | Interest rate |
|---|---|
| Existing investor loans (*Includes loans at variable and fixed interest rates) | 6.21% p.a. |
| Variable rate investor loans | 6.24% p.a. |
| Fixed rate investor loans (1-3 years) | 5.53% p.a. |
| Fixed rate investor loans (> 3 years) | 6.47% p.a. |
| Interest-only investor loans | 6.33% p.a. |
| Principal & interest investor loans | 6.15% p.a. |
Source: Reserve bank of Australia April 2026.
Average mortgage rates for new investor loans
The average interest rate on all new investor loans is 6.10% p.a., the same as the average rate on new short-term fixed investor loans (one to three years).
That's 0.06 percentage points lower than the average variable investor rate of 6.16% p.a., and 0.53 percentage points lower than the average rate on new long-term fixed investor loans (more than three years), at 6.63% p.a.
New interest-only investor loans have an average interest rate of 6.23% p.a., compared with 6.09% p.a. for new principal and interest investor loans — a premium of 0.14 percentage points.
| Product | Interest rate |
|---|---|
| New investor loans (*Includes loans at variable and fixed interest rates) | 6.10% p.a. |
| Variable rate investor loans | 6.16% p.a. |
| Fixed rate investor loans (1-3 years) | 6.10% p.a. |
| Fixed rate investor loans (> 3 years) | 6.63% p.a. |
| Interest-only investor loans | 6.23% p.a. |
| Principal & interest investor loans | 6.09% p.a. |
Source: Reserve bank of Australia April 2026.
Average interest rates versus the lowest rates available
The average home loan interest rate in Australia, based on Reserve Bank data, is noticeably higher than the lowest rates currently available in the market. Borrowers paying an average, or above-average, rate could reduce their repayments by refinancing to a more competitive home loan, if eligible.
Take, for example, the average variable mortgage interest rate for existing owner occupier loans of 5.98% p.a. and compare it with the lowest refinance rate currently available to new borrowers of 5.69% p.a. (comparison rate 5.71% p.a.). Switching from the average rate to the lowest available rate would save a borrower with a $700,000 loan and 25 years remaining by around $123 per month in repayments.
If that rate difference were maintained over the remaining life of the loan, the borrower would save nearly $37,000 in interest.
It's important to remember that the average mortgage interest rate includes all types of home loans, including those priced higher for borrowers who present a greater lending risk. The lowest home loan rates are generally reserved for borrowers with a strong credit profile, stable income and lower loan-to-value ratio (LVR).
Average mortgage rates over time
Average home loan rates in Australia are still well below the levels seen for much of the past 60 years. That's despite interest rates rising from the record lows experienced between March 2020 and April 2022 during the COVID-19 pandemic.
The average mortgage rate peaked at around 17% in 1989 and early 1990, when Australia was battling high inflation and undergoing financial deregulation. Interest rates rose again in 2008 during the Global Financial Crisis, reaching a peak of 9.60% before dropping to the lowest rates the country had experienced in the prior 40 years in April 2009.
While interest rates have fallen dramatically since then, the average mortgage size has grown substantially as property prices have increased. As a result, many borrowers today are servicing much larger loan balances, meaning lower interest rates don't necessarily translate into lower mortgage repayments.