Multiple Australian lenders have started cutting home loan rates for new customers even as the Reserve Bank of Australia is widely expected to leave the cash rate unchanged at its meeting next week. Since the RBA last hiked in May, 11 lenders have cut at least one variable home loan rate for new borrowers.
That shift is already reshaping the market. Canstar data insights director Sally Tindall said lenders had “taken the knife” to new customer rates to pull in fresh business, and said existing borrowers would naturally feel a bit miffed. ING and BOQ are among the lenders to trim variable rates, while 40 lenders now offer at least one variable rate under 6 per cent, including Westpac among the Big Four.
The latest moves matter because they show mortgage competition is heating up even before the central bank makes its next call. In the same week, ANZ and Macquarie Bank cut selected fixed home loan rates, while Westpac and NAB recently lifted fixed rates, underscoring how uneven the pricing has become across the market.
NAB has also changed its view on the cash rate, scrapping this week its earlier forecast for one final hike in August and saying the cash rate has peaked at 4.35 per cent. Chief economist Sally Auld said the next move is likely to be down, though the timing is uncertain, and NAB now expects cuts to start in the second quarter of next year before ending 2026 at 3.6 per cent.
That puts NAB at odds with some of the biggest lenders. Commonwealth Bank is pencilling in cuts in May and August next year and expects the RBA to stay on hold until early 2027, while ANZ sees rates flat for the rest of the year. Westpac is still forecasting two more hikes in August and September this year, although its outlook is under review.
For borrowers, the immediate question is not whether the RBA will move next week, but who can actually qualify for the cheaper loans now being advertised. Tindall said the RBA is set to pull the handbrake on the cash rate next week, but the market is already looking beyond that meeting as lenders compete for new business and the first cut remains some way off.
