Eleven lenders have trimmed select variable rates since the May raise, but only new customers stand to benefit
A growing number of lenders have reduced at least one variable home loan rate for new customers since the Reserve Bank of Australia's most recent cash rate increase, according to rate tracking data from Canstar.com.au.
While all lenders in the Canstar database have passed on the May RBA rate rise in full, 11 have also cut select variable rates in the past six weeks to attract new business. These include ING, BOQ, Community First, and Queensland Country Bank. As a result, 40 lenders now offer at least one variable rate below 6%.
The cuts come as the RBA is widely expected to hold the cash rate steady at its meeting next week.
"Eleven lenders have taken the knife to new customer rates in the last six weeks in a bid to coax new business in the door," said Sally Tindall (pictured right), data insights director at Canstar.com.au. "While existing customers will naturally be a bit miffed by such moves, what this tells us is that competition in the mortgage market is heating back up and there are discounts to be had for those willing to play ball.
"The RBA is set to pull the handbrake on the cash rate next week, and while the conversation has shifted to when the first cut might arrive, the reality is we're still a long way from the central bank shifting it in reverse."
NAB revised its cash rate forecast on Tuesday, abandoning its previous expectation of a further hike. The bank now expects the RBA to hold the cash rate steady for the remainder of the year before delivering three 0.25 percentage point cuts in 2027, bringing the cash rate to 3.60%.
"NAB's dramatic forecast reversal is the latest reminder that the economic outlook remains highly uncertain," Tindall said. "Just weeks ago, it was predicting another hike as early as June, whereas now it's forecasting three cuts by the end of next year."
CBA made a similar revision last month, forecasting two 0.25 percentage point cuts in May and August next year. Both banks cited tighter financial conditions as the basis for their changed outlook.
Westpac continues to forecast two further 0.25 percentage point hikes in 2026, with rate cuts not expected until 2028.
| Current big four bank cash rate forecasts | |||
| Bank | June forecast | Next move | Cash rate at end 2027 |
|---|---|---|---|
| CBA | No change | Cut in May 2027 | 3.85% |
| Westpac | No change | Hike in Aug 2026 | 4.85% |
| NAB | No change | Cut in Q2 2027 | 3.60% |
| ANZ | No change | No change | 4.35% |
| Source: Canstar.com.au | |||
Canstar.com.au data indicates that for a borrower with a $600,000 mortgage and 25 years remaining, an additional 0.25 percentage point hike in August — as Westpac anticipates — would lift monthly repayments by $92. Across four hikes in February, March, May, and a potential August move, the cumulative monthly increase would reach $364.
"While the prospect of another cash rate hike this year is fading, households can't completely rule it out," Tindall said. "If it materialises, a borrower with a $600,000 mortgage would be paying around $364 more each month than they were at the start of the year.
"Use the expected pause next week to do a health check on your mortgage. If your rate isn't competitive, now is the time to make some noise.
"There are still 40 lenders offering at least one variable rate below 6%, but you might have to turn yourself into a new customer to benefit."
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