Methodology — Asset Finance Rate Index

The short version

The Asset Finance Help Rate Index is a 12-segment model that estimates indicative median asset finance rates for Australian SME borrowers. It uses three publicly available inputs (RBA cash rate, observed broker panel rate cards, and the RBA SME Bulletin's rate-sensitivity finding) plus a simple model with explicit parameters.

It is not a survey, not a submitted-applications dataset, and not a guarantee of any rate. It is an open, defensible estimate.

Why publish a model rather than a survey?

Submitted-application data exists — brokers and lenders have it. None of them publish it routinely, and when they do publish summary figures, the methodology is opaque. A modelled index has weaker resolution than a real survey, but it has two advantages:

• Replicable. Anyone with the published inputs can reproduce the figures. The model is small enough to fit on a page.
• Honest about uncertainty. The model parameters are explicit, so the limitations are explicit too. Where the model is weak, we say so.

Long-term, we want to add observed-application data via a quarterly broker survey. That's a future-iteration item, not Q2 2026.

Inputs

1. RBA quarter-end cash rate

Pulled from the RBA's official cash rate target series. Each quarter, we take the cash rate effective on the last calendar day. For Q2 2026 this is 4.35% (the 6 May 2026 hike was effective immediately, so the entire post-6-May portion of the quarter sits at this level).

2. Q2 2026 anchor rates (12 segments)

The anchor rates are derived from observed broker panel rate cards in May 2026. Two primary sources:

• SmartSearch Finance (commercial-loans.net.au), indicative rate table dated 18 May 2026 — gives band low/high by product (chattel mortgage 6.26–8.74% etc).
• Money.com.au, lender panel as of 27 May 2026 — gives specific lender rates across a 10-lender panel.

For each (structure, tier) combination, the anchor is calibrated to a midpoint:

• Prime: Observed band low + 0.50pp (above the absolute lowest "loss leader" rates that only the strongest 1–2% of files secure).
• Average: Observed band midpoint + 1.50pp.
• Low-doc: Observed band high + 3.50pp (low-doc loading above the conventional band).

Full anchor table:

3. Cash rate passthrough — the sensitivity coefficient

The October 2025 RBA Bulletin ("Small Business Economic and Financial Conditions") reports that variable SME lending rates declined "by a little more than the cash rate" during the 2025 easing cycle — approximately 85bp on a 75bp cash rate easing, implying sensitivity ~1.13. Prime SME asset finance, being competitively priced, exhibits similar elasticity.

Subprime / low-doc segments have lower cash-rate elasticity because risk premium dominates rate determination — when the file is weak, a 25bp cash rate move doesn't move the lender's risk-based pricing much.

Sensitivity coefficients used in the model (rate change per 100bp cash rate change):

4. Competition trend

The October 2025 RBA Bulletin also notes that the spread between SME and large-business lending rates has narrowed to a historically low level. Non-bank market share has grown materially since 2022. We apply a small per-quarter compression to the prime tier only (5bp/quarter), neutral elsewhere. This is conservative — we don't claim large competition effects.

The model

For each (structure, tier, quarter) combination:

rate(s, t, q) = anchor_rate(s, t)
              + (cash_rate(q) - cash_rate(Q2_2026)) × sensitivity(t)
              - competition_trend(t) × quarters_back_from_Q2_2026

Where:

• anchor_rate(s, t) is the Q2 2026 anchor rate from the table above
• cash_rate(q) is the RBA quarter-end cash rate for quarter q
• sensitivity(t) is the tier-specific cash-rate passthrough coefficient
• competition_trend(t) is the per-quarter spread compression
• quarters_back_from_Q2_2026 is how many quarters earlier we're modelling

For Q2 2026 itself, the formula collapses to rate = anchor_rate. For earlier quarters, we walk the cash rate backward and add the competition trend.

Worked example

To compute the modelled prime chattel mortgage rate for Q3 2025:

• Anchor rate (chattel mortgage, prime, Q2 2026): 6.76%
• Cash rate delta (Q3 2025 vs Q2 2026): 3.60% − 4.35% = -0.75pp
• Sensitivity (prime): 1.10
• Cash-rate adjustment: -0.82pp
• Competition adjustment: 3 quarters back × -0.05pp/quarter = -0.15pp (positive because rate was higher earlier)
• Modelled Q3 2025 rate: 6.76% + (-0.82) − (-0.15) = 6.09%

You can verify this against the published CSV.

What the model does not do

• It is not survey data. No actual loan applications were observed or aggregated. The model infers rates from anchor + cash rate + a small competition trend.
• It does not capture intra-quarter rate moves. When the RBA hikes mid-quarter, the model reports the quarter-end rate. Brokers writing files in the first half of the quarter would have seen lower pricing.
• It does not separately price asset-class loadings. Heavy yellow goods, used assets, marine and leisure all carry asset-specific loadings on top of these segment medians. The index reports the base segment; the loading is left to the per-application discussion.
• It does not model dealer / manufacturer subsidised rates. Captive financiers running 0% or sub-prime-rate promotions are excluded — those are subsidies, not market pricing.
• It does not model commercial property-secured rates, private credit, or unsecured business loans. Those are separate markets with different pricing dynamics.

Update cadence

The index updates quarterly:

• Cash rate inputs: Updated immediately after each RBA decision (or with the quarter-end value if no decision that quarter).
• Anchor rates: Re-observed from the same broker panel sources each quarter. If panel composition changes materially, this is noted in the methodology footnote.
• Sensitivity / competition parameters: Reviewed annually, or when a new RBA Bulletin provides updated SME credit conditions data.

If a quarter sees a major market dislocation (e.g. a credit shock, a non-bank withdrawal, a regulatory change), we publish an interim update rather than waiting for the next quarter.

Version history

• v1.0 (2 June 2026) — Initial publication. Q2 2026 current quarter, eight quarters of history back to Q3 2024.

Telling us we got something wrong

If you believe a parameter is off, a source has been mis-cited, or the model is producing a result that doesn't match what brokers and lenders are seeing in practice, please tell us. We publish errata and rebuild the index when warranted. Email [email protected] or use the form on the rate index page.

Question our methodology

If you think a parameter is wrong, a source is mis-cited, or the model is producing a result that doesn't match what brokers and lenders are seeing in practice, tell us. We publish errata and rebuild the index when warranted.