What the series measures
Each month the Reserve Bank of Australia publishes, in statistical table F6, the average interest rate on housing loans funded that month. This page follows one line of that table, series FLRHOFVA: new loans to owner-occupiers at a variable rate, across all reporting lenders. Each lender's rate is weighted by the value of the loans it funded in the month, so a large bank writing many loans counts for more than a small lender writing few.
A loan counts once it is funded, when any part of the money is made available to the borrower, not when it is approved. Because the figure is the rate written into each new loan, it already includes whatever discount the lender gave. That makes it a different number from the rates on a lender's website.
Who compiles it and how
The figures come from the monthly returns banks and other lenders make to APRA, the prudential regulator, under its Economic and Financial Statistics collection; the RBA turns them into table F6. Every bank and registered financial corporation with $6 billion or more of housing credit reports, which the RBA says captures over 95 per cent of all housing credit. The definitions are set out in APRA's reporting standard ARS 744.0.
The RBA calls the rates indicative and says they are likely to be revised regularly, so a figure on this page can differ slightly from one you noted down from an earlier table.
What it includes and leaves out
- It includes principal-and-interest and interest-only loans at every loan size and loan-to-value ratio, as long as the loan is variable and for a home the borrower lives in. Table F6 also breaks new owner-occupier lending down by those features.
- It leaves out fixed-rate loans, investor loans and the rates existing borrowers pay, which table F6 publishes as separate series. In almost every month since the table began, the average variable rate on outstanding owner-occupier loans has been higher than the rate on new ones.
- It is not a standard variable rate, an advertised rate or a comparison rate. It is an average of what was charged, so plenty of borrowers paid less than it and plenty paid more.
How to compare it with your quote
Use the series as a check on whether a quote is in the normal range for the month, not as the rate you should expect. Your own rate depends on your deposit, the loan size and whether you take a package with an annual fee. Moneysmart suggests getting the Key Fact Sheet for each loan you are comparing, which every lender must provide in the same layout, and comparing at least two lenders.
If you already have a variable loan, compare your rate with this series too. A rate well above the average on new loans is a reason to ask your lender for a better one or to look at what another lender would charge you to refinance.
To turn a rate into repayments, use the mortgage calculator. The debt-to-income calculator and the rent vs buy calculator both take the rate you were quoted. Read the series with the cash rate target: variable rates follow the target, but the average can also move between decisions as lenders change their discounts.
Reading the chart and the table
Each point is one month, dated the first of that month, and the table lists the most recent months first. The series starts in July 2019, the first month in table F6. The rates are published as percentages per year to two decimal places, and the series downloads as a CSV with the RBA's figures.