Canstar data shows 18 lenders trimmed variable rates since May, with one bank doubling down on fixed-rate cuts
Eighteen lenders have reduced variable mortgage rates since the Reserve Bank of Australia's last rate rise in May, according to the latest Canstar interest rate wrap-up, as competition in the home loan market intensifies ahead of the central bank's August meeting.
The database found AMP Bank made the largest fixed-rate cut of any lender, reducing rates by up to 0.50 percentage points — more than double the average fixed-rate reduction of 0.22 percentage points recorded across five lenders.
The move signals confidence that the RBA will leave the cash rate unchanged when its board meets on 11 August. The timing carries added weight for the 13% of major bank borrowers who hold no repayment buffer.
Bendigo Bank became the latest lender to cut variable rates in the past week, reducing one product by 0.15 percentage points to 5.89%. It joins 14 other lenders now offering at least one variable rate below 5.9%. The lowest variable rates on the market remain held by LCU and Pacific Mortgage Group, both at 5.69%. Forty lenders now offer at least one variable rate below 6%, according to the database.
| Provider | Loan | Max LVR | Interest rate | Comparison rate |
|---|---|---|---|---|
| Pacific Mortgage Group | Variable P&I <60% | 60% | 5.69% | 5.69% |
| LCU | Simple Home Loan | 95% | 5.69% | 5.71% |
| Horizon Bank | First Home Buyer Loan P&I <70% | 70% | 5.74% | 5.74% |
| Unity Bank | Essential Worker Variable | 95% | 5.80% | 5.85% |
| Virgin Money | Residential Lite Home Loan Variable P&I <80% >150k | 80% | 5.84% | 5.86% |
| Border Bank | First Home Loan P&I 80-98% | 98% | 5.84% | 5.91% |
| Police Bank | First Home Loan P&I 80-98% | 98% | 5.84% | 5.91% |
“Competition among lenders continues to create opportunities for some households to cut their borrowing costs,” said Sally Tindall (pictured right), data insights director at Canstar. “Negotiating with your lender can get you on your way, but the bigger gains still typically come from refinancing.”
Tindall pointed to the Australian Prudential Regulation Authority's Quarterly ADI Property Exposures report for the March 2026 quarter, which showed loans between 30 and 89 days in arrears rose slightly following the RBA's rate rises, though the figure remained low at 0.49% of the loan book.
“Similarly, the value of home loans on interest-only loans rose marginally in the March quarter to 11.8% of all mortgages, also below average – evidence existing borrowers aren't switching over to interest-only in search of relief from rising rates,” she said.
“The same can't be said for owner-occupiers buying property with next-to-no deposit. While overall lending took a backwards step in the March quarter, the proportion of new owner-occupier loans with a deposit of 5% or less hit a record high – not exactly ideal timing given the subsequent slide in property prices.”
However, she said “at just 4.3% of all new owner-occupier loans, it's unlikely to have APRA worried just yet”.
Separately, APRA data showed the proportion of new loans with a debt-to-income ratio above six times rose to 10.8% among investor borrowers, up from 8.2% a year earlier. Across all new borrowers, the figure increased to 6.4% from 5.3%, a ratio regulators are monitoring closely.
Westpac remains the only major bank forecasting a 25-basis-point rate rise at the RBA's August meeting.
The RBA's next monetary policy board meeting is scheduled for August 10 and 11. Two key data releases are due beforehand: the June quarter consumer price index on July 29, and the monthly household spending indicator on August 4.
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