Switch Banks for a Better Home Loan Rate After RBA Hike 2026

After the Reserve Bank of Australia (RBA) lifted its key rate to a 15-year high, many mortgage holders are wondering if now is the right time to switch banks for a better home loan rate. With the average variable rate climbing to 6.49% and some lenders offering rates near 6%, switching could save you hundreds of dollars each month. But experts caution that finding a big discount is becoming harder. Here’s what you need to know.

Current Home Loan Rates in Australia

Following the latest RBA hike, the average variable mortgage rate for owner-occupiers is now 6.49%, according to Reserve Bank data. However, some banks are offering rates close to 6%. For a $600,000 loan with 25 years remaining, switching from the average rate to a lower rate could cut your monthly repayments by around $180.

Among the big four banks, Westpac currently offers the lowest variable rate at 6.24%, according to comparison platform Canstar. Dozens of smaller lenders are offering even lower rates, with a handful providing fixed rates below 6%, mostly hovering at 5.99%.

Comparison of Home Loan Rates

Should You Switch Banks Now?

Switching banks can be a smart move if you’re on a higher rate, but it’s important to consider the costs and effort involved. Refinancing typically involves application fees, valuation fees, and discharge fees, which can eat into your savings. However, many lenders offer cashback incentives to attract new customers, which can offset these costs.

Moreover, it’s getting harder to find big discounts. Canstar data indicates just two lenders will offer variable rates under 6% once Tuesday’s rate increase is passed on. If the RBA hikes again, the lowest variable rate will likely lift to 6.25%. So while switching can save you money, the window for ultra-low rates may be closing.

Key Takeaways

• Switching from the average variable rate (6.49%) to a lower rate (near 6%) could save you around $180 per month on a $600,000 loan.
• Westpac offers the lowest variable rate among the big four at 6.24%.
• Smaller lenders and credit unions often have lower rates, including fixed rates below 6%.
• Refinancing costs and stricter lending criteria may reduce the benefits of switching.
• Act sooner rather than later, as rates are expected to rise further.

How to Get a Better Home Loan Rate

To secure a better rate, start by comparing offers from multiple lenders. Use comparison websites like Canstar or Mozo to see current rates. Then, negotiate with your existing lender—they may offer a discount to keep your business. If not, consider refinancing to a lender with a lower rate. Be sure to factor in all fees and charges, and consider fixing a portion of your loan if you prefer stability.

It’s also wise to consult a mortgage broker who can access deals from various lenders and handle the paperwork. They can help you assess whether switching is financially beneficial in your circumstances.

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