The rate you’re actually offered can differ meaningfully from the “from” rate advertised on a comparison table. Lenders price loans based on a combination of market-wide factors and your own circumstances, here’s what’s driving the number.
Market-wide factors
The RBA cash rate. The Reserve Bank of Australia’s cash rate influences lenders’ own funding costs, and variable rates tend to move up or down in the same direction over time, though not always by the same amount or on the same day. Lenders can and do move independently of the RBA.
Lender funding costs. Banks and non-bank lenders fund their loans differently, through customer deposits, wholesale funding markets, or securitisation, and shifts in those funding costs can push rates up or down independently of the cash rate.
Competition. When lenders are actively trying to grow their home loan book, they often sharpen rates or offer cashback incentives to win new customers, which is part of why shopping around, or asking your current lender to match a competitor, can pay off.
Factors specific to you
Loan-to-value ratio (LVR). Borrowers with a larger deposit relative to the property value are seen as lower risk, and typically qualify for better rates. Crossing below certain LVR thresholds, commonly 80%, 90%, can unlock materially better pricing.
Loan purpose. Owner-occupier rates are typically lower than investor rates, and principal-and-interest repayments are typically priced lower than interest-only.
Credit history. A clean credit history and a manageable level of existing debt relative to your income both support a better rate offer. A poor credit history can restrict you to a smaller pool of lenders, sometimes at a higher rate.
Loan size. Some lenders offer better rates above certain loan thresholds, since a larger loan is more cost-efficient for them to service relative to their fixed processing costs.
Employment and income stability. Lenders assess how reliably you can service the loan. Self-employed borrowers or those with variable income may face stricter assessment criteria or be directed toward low-doc loan products, which typically carry a rate premium.
Rate type itself
Fixed and variable rates are priced differently because they carry different risk for the lender. Fixed rates are set based on where the lender expects funding costs to sit over the fixed term, which is why fixed rates can sit above or below variable rates depending on market expectations at the time. See our fixed vs variable guide for how to weigh the two.
What you can actually influence
You can’t move the cash rate or lender funding costs, but you can improve your own position: building a larger deposit, paying down other debts before applying, keeping your credit history clean, and comparing your loan purpose and structure against what different lenders reward. Negotiating directly with your current lender, armed with a competitor’s rate from our comparison table, is also a legitimate and often underused lever.