A stealth war on variable home loan rates is breaking out among Australia's lenders, with 11 cutting at least one rate in the past six weeks even as the cash rate sits at its highest level in years.
Canstar rate tracking shows that while every lender in its database has passed on the May RBA hike in full, a growing cohort — including ING, BOQ, Community First, and Queensland Country Bank — has simultaneously reduced select variable rates to attract new business. The result is that 40 lenders now offer at least one variable rate below 6%, with the lowest owner-occupier variable sitting at 5.69% and the lowest investor variable at 5.85%.
Canstar data insights director Sally Tindall (pictured) said the activity signals a meaningful shift in lender behaviour.
"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," Tindall said.
The catch is that existing borrowers are largely locked out of these discounts. Tindall acknowledged the frustration this creates but framed it as an opportunity.
"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," she said.
For brokers, this is a direct refinancing conversation starter. Clients sitting on legacy variable rates well above 6% may be able to access materially lower rates simply by switching lenders — and 40 options currently sit below the 6% threshold.
Brokers appear well placed to capture that opportunity. The MFAA reports mortgage brokers settled 81% of all new residential home loans in the March 2026 quarter — the highest market share ever recorded. Google Trends data shows searches for "mortgage broker" hit an all-time high in May, surpassing the previous record set during April 2020 COVID lockdowns.
NAB became the latest major bank to reverse its cash rate outlook on Tuesday, abandoning a previous call for another hike and now forecasting three 0.25-percentage-point cuts in 2027 taking the cash rate to 3.60%. CBA has similarly shifted dovish, tipping two cuts — in May and August 2027. Westpac is the clear outlier, still forecasting two more hikes including one in August before cuts arrive, but not until 2028. ANZ expects the cash rate to hold at 4.35% through 2027.
Tindall said the NAB reversal underscores just how volatile the outlook has become.
"NAB's dramatic forecast reversal is the latest reminder that the economic outlook remains highly uncertain. 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," she said.
Tindall urged borrowers not to bank on imminent relief regardless.
"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," she said.
While the probability of a further 2026 hike is diminishing, Westpac's August scenario remains live. Canstar modelling shows that for a borrower with a $600,000 mortgage and 25 years remaining, four hikes across February, March, May, and August would add $364 per month to minimum repayments compared to the start of the year. On an $800,000 loan the figure rises to $485 per month, and to $606 on a $1 million loan.
For brokers, the window between now and any potential August hike is the clearest opportunity this year to initiate proactive rate review conversations with clients.
Tindall's advice is pointed: "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."
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