18 Lenders Cut Rates as Home Loan War Heats Up

Lenders are slashing variable and fixed home loan rates even as the RBA holds firm — here's what it means for your mortgage right now.

Competition in Australia's home loan market has reached a fever pitch. Eighteen lenders have cut their variable mortgage rates since the Reserve Bank of Australia's last rate rise in May, while fixed rates are also falling sharply — and the trend shows no sign of stopping ahead of the RBA's August board meeting.

As MPA Australia reports, the gap between what lenders are offering new customers and what existing borrowers are paying has rarely been wider. For anyone sitting on a rate that hasn't been reviewed in the past twelve months, this is the kind of market that rewards action.

The Fixed Rate Surprise: AMP Bank Leads the Charge

While variable rate cuts have grabbed most of the headlines, it's the fixed rate market that has produced the most striking move. AMP Bank has made the biggest single fixed-rate reduction of any lender, cutting rates by up to 0.50 percentage points. That's more than double the average fixed-rate reduction of 0.22 percentage points recorded across the five lenders that trimmed fixed rates over the same period.

A 0.50 percentage point reduction is real money. On a $600,000 loan with 25 years remaining, the difference between a rate half a percentage point higher and lower works out to roughly $175 per month. You can check what that means for your own balance using the repayment calculator.

AMP Bank's move signals something important about market expectations: lenders who aggressively cut fixed rates are pricing in confidence that the RBA will hold at its August 10–11 board meeting, or ultimately move lower. Fixed rates are forward-looking — they reflect where markets expect the cash rate to head, not just where it sits today.

Variable Rates: Where the Market Now Sits

On the variable side, the action has been just as significant. Bendigo Bank is the latest institution to join the rate-cutting pack, having reduced one product by 0.15 percentage points to 5.89%. That puts it among fourteen other lenders that now offer at least one variable rate below 5.9%.

The most competitive variable rates in the market sit at 5.69%, held by LCU and Pacific Mortgage Group. Altogether, forty lenders now have at least one variable rate below 6%. That's a substantial shift from the peak-rate environment that many existing borrowers are still locked into.

This is where the opportunity lies for a large number of Australian mortgage holders. If your current variable rate starts with a '6' — or higher — you may be paying well above what the market is offering, and your lender is unlikely to volunteer that information. Comparing refinance options now could put hundreds of dollars a month back in your pocket.

The Borrower Stress Picture

Amid the competition, there are signs that some households remain under pressure. APRA's Quarterly ADI Property Exposures report for the March 2026 quarter showed that loans between 30 and 89 days in arrears rose slightly following the RBA's rate rises, though the figure remained contained at just 0.49% of the total loan book.

Interest-only lending is also stable: 11.8% of all mortgages are currently on interest-only terms, below the longer-run average. That tells us most borrowers haven't switched to interest-only as a relief measure — a healthy sign for the broader system.

More notable is the emerging picture at the entry end of the market. The proportion of new owner-occupier loans with a deposit of 5% or less hit a record high in the March 2026 quarter. At 4.3% of all new owner-occupier loans, APRA has said the figure isn't yet cause for concern — but these borrowers entered the market with minimal equity buffer, and many did so just ahead of a softening in some property values. Separately, a figure that regulators are watching closely is the proportion of new investor loans with a debt-to-income ratio above six times, which rose to 10.8%, up from 8.2% a year earlier. Across all new borrowers, the same metric rose to 6.4% from 5.3%.

For investors assessing new purchases, understanding how much serviceability headroom you have under current lender criteria is essential. The borrowing power calculator is a useful starting point.

The August Meeting: Two Key Dates to Watch

Westpac remains the only major bank formally forecasting a 25-basis-point rate rise at the RBA's August meeting. All other major lenders are holding a "hold" view for August, with any rate cuts not expected until early-to-mid 2027 at the earliest.

Two data releases will shape the outcome. The June quarter Consumer Price Index lands on July 29, and the monthly household spending indicator is due on August 4. If either reading surprises on the upside, the board will find it harder to justify sitting on its hands.

But the lenders are not waiting for the RBA. Eighteen have already moved rates lower, and AMP Bank's fixed rate cuts are the most aggressive on the market. For borrowers, the message is clear: the window of competition is open right now.

The cheapest home loans currently available are substantially below what most existing borrowers are paying. Even calling your current lender and asking for a rate review can sometimes produce a discount — but for most borrowers, the bigger gains come from being willing to switch. A mortgage broker can help you cut through the noise and work out what's genuinely available for your situation.