Australian Banks Cut Mortgage Rates as RBA Pauses, June 12

By Huzaifa Zahoor

June 11, 2026

11:21 PM

3 min read

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Key Points

11 lenders cut variable rates in past six weeks targeting new customers.

40 lenders now offer rates below 6% as competition heats up.

NAB and CBA forecast RBA cuts starting Q2 2027, reversing hike predictions.

Existing borrowers can refinance to access lower rates with competing lenders.

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Eleven Australian lenders have cut variable home loan rates in the past six weeks, even as the Reserve Bank of Australia holds the cash rate at 4.35%. The cuts apply to new customers only, but signal a shift in bank sentiment. NAB and CBA now forecast RBA rate cuts starting in 2027, reversing earlier predictions of further hikes.

Banks Cut Rates Despite RBA Pause

Eleven lenders including ING, BOQ, Community First, and Queensland Country Bank have slashed variable rates since May’s RBA hike. The result: 40 lenders now offer at least one variable rate below 6%, with the lowest owner-occupier rate at 5.69% and investor rate at 5.85%. Existing customers are locked out of these discounts, which target new borrowers only.

Major Banks Flip Rate Forecasts

NAB reversed its forecast on Tuesday, scrapping predictions for another hike and now expecting the RBA to hold rates for the rest of 2026. The bank forecasts three 0.25 percentage point cuts in 2027, bringing the cash rate to 3.60%. CBA made a similar shift last month, predicting two 0.25 cuts in 2027. Westpac remains the outlier, still forecasting two hikes in 2026 and cuts not until 2028.

What This Means for Borrowers

Mortgage brokers settled 81% of all new residential loans in the March 2026 quarter, the highest share on record. Existing borrowers on rates above 6% can access lower rates by refinancing with one of the 40 lenders offering sub-6% options. Banks are competing aggressively for new business as the market cools.

Economic Slowdown Drives Rate Outlook

NAB cited tighter financial conditions and slowing economic growth as reasons for its forecast shift. The bank revised down house price and credit growth forecasts. NAB brought forward rate cut expectations from H2 2027 to Q2 2027, signaling confidence in faster easing if growth weakens further.

Final Thoughts

Australian banks are preparing for rate cuts, not hikes. With 40 lenders offering sub-6% rates and major banks forecasting cuts in 2027, borrowers willing to refinance have real opportunities to lower their costs now.

FAQs

Can existing borrowers access the new lower rates?

No. Rate cuts apply only to new customers. Existing borrowers must refinance with another lender to access lower rates.

When will the RBA start cutting rates?

NAB and CBA forecast cuts from Q2 2027, while Westpac expects 2028. The RBA likely holds at 4.35% through 2026.

What is the lowest mortgage rate available now?

Owner-occupier variable rates start at 5.69%, while investor rates begin at 5.85% from competitive lenders.

Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.

About Author

Huzaifa Zahoor

Co Founder

Huzaifa Zahoor is the engineer who built Meyka. He has spent years writing Python, training AI models, and building data pipelines specifically for financial markets. His technical articles have reached over 30,000 readers on Medium, so he knows how to make complex things easy to follow. If this article touches on how the tools work, he is the person who actually built them.