The Reserve Bank of Australia has cut the cash rate three times in 2026 already. From 4.85% at the start of the year to 4.10% now, that’s 75 basis points of relief — the fastest cutting cycle since the early-COVID response of 2020.
If you’re on a variable rate, you’ve already felt it. If you’re on a fixed rate, you haven’t. Here’s the full picture — and, more importantly, what to do about it.
What the cuts mean for variable borrowers
Major lenders have passed on most of the cuts. On a $600,000 loan, 0.75% off translates to roughly:
- Monthly repayment: ~$280 lower
- Annual saving: ~$3,360
- 30-year interest saving (if rate holds): ~$100,000+
Most variable borrowers are in a materially better position than they were last December. The typical variable home loan rate in April 2026 sits around 5.75% for owner-occupiers paying principal and interest, down from ~6.50% last year.
But — here’s the loyalty tax. Most big-4 banks have passed the cuts to NEW customers but kept existing customers on higher rates unless they ask. ACCC research consistently shows a 0.2–0.4% gap between “new” and “existing” rates at the same bank.
If you haven’t asked your lender to review your rate in the last 6 months, you’re probably overpaying.
What the cuts mean for fixed borrowers
If you’re locked in at a higher fixed rate, you have three options:
1. Wait out the fix
If your fixed period ends in the next 6-12 months, usually the lowest-stress option. Exit fees are zero at the end of the fixed term, and by then you’ll have clarity on whether the RBA continues cutting or pauses.
2. Break the fix early
If your fixed rate is significantly above current variable rates and your fixed period has 2+ years left, breaking may make sense — but break costs in a falling-rate environment can be $5,000–$20,000+.
Always get a written break-cost quote from your lender first. A home loan specialist can then model whether the net saving after break costs is worth it.
3. Refix at a lower rate
Some lenders allow “rate lock” or refixing mid-term. Availability varies by lender. A specialist can tell you whether your lender offers this and what rate you’d get.
What about new fixed rates?
This is where most buyers get confused. Fixed rates haven’t fallen as much as variable rates in 2026. The best 2-year fixed rate available is around 5.24% — below the advertised variable but not dramatically so.
Why? Fixed rates are priced off wholesale swap rates and long-term market expectations, not the RBA cash rate directly. If markets think the cutting cycle is nearly done, fixed rates stop falling even as the RBA keeps cutting.
What should you do in the next 30 days?
Whatever your situation, three actions are nearly always worth taking:
- Call your lender and ask for a rate review. A 5-minute call often yields a 0.15–0.30% rate reduction, especially at the big 4. Banks would rather keep you than lose you.
- Get a specialist’s comparison quote. Free, no obligation, and tells you exactly what the rest of the market would offer you. Most variable borrowers find a 0.2–0.5% better rate this way.
- Model refinance costs vs savings. Use the free refinance calculator to see your break-even. Typical break-even is under 12 months when the rate gap is 0.5%+.
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Get Matched →Looking forward — will the RBA cut again?
Market expectations (as of April 2026) are split. Inflation is heading back toward the RBA’s 2–3% band, unemployment is edging up, and the economy is softening. A further 0.25% cut in the second half of 2026 is plausible but not certain. A hold for the rest of the year is also on the table if housing prices re-accelerate.
The key takeaway: don’t wait for rates to bottom. The cuts that have already happened are enough to justify reviewing your loan now. Waiting for the “perfect bottom” costs money in the meantime.
This article is general information only, not financial advice. For advice specific to your situation, speak to a licensed home loan specialist.