RBA holds rates, but here's how to cut your mortgage

The RBA holds rates, but Aussies can still cut hundreds off their mortgage by negotiating with their bank.

Aussies are being left to negotiate their own rate cuts after the Reserve Bank held steady at its June meeting.

For the first time this year, the RBA has paused, leaving the cash rate unchanged at 4.35% after back-to-back hikes in February, March and May.

The call, made at the June board meeting in Sydney, keeps rates at their highest level since November 2011, with no immediate relief in sight for mortgage holders.

But here's the reality: borrowers don't have to wait for the RBA to move. Many can cut their rate now by pushing their lender for a better deal or switching to a cheaper loan.

Homeowners can still cut their own rates

Even without a fresh hike, many mortgage holders are already paying significantly more than they were at the start of 2026.

On an average home loan of $736,000, monthly repayments have jumped by about $342 following earlier increases, according to Compare the Market.

"That's in after-tax dollars, meaning you need to earn roughly $6000 more a year to cover it," says David Koch.

The upside is borrowers don't have to wait for the RBA to move. Many can reduce repayments right now by negotiating with their lender or refinancing to a cheaper deal.

How to land a lower rate

Two key options can help borrowers claw back savings:

1. Ask your lender for a discount

"Everyone should be calling their bank or broker," Koch says.

"We still see borrowers paying above 7%, even though rates in the high 5% and low 6% range are available."

Even small cuts can make a difference, potentially saving hundreds each month and thousands over time.

Competition remains fierce, with refinancing activity up 18.7% over the past year, giving borrowers leverage.

Before calling:
• Know your current rate
• Check your lender's advertised rates for new customers
• Compare offers from rival lenders, including smaller players

Successful negotiations can deliver cuts of 0.10% to 0.50%, or more for strong borrowers.

2. Consider refinancing

If your lender won't move, switching can unlock sharper rates and better features.

Borrowers often only get serious retention offers when they are about to leave, but banks typically match competitor rates rather than beat them.

Looking beyond the major banks, some lenders are offering rates below 5.9%, with the sharpest deals around 5.84%.

Refinancing does come with costs, including exit fees and government charges, so weigh up the total benefit.

Who is most likely to get a better deal?

Borrowers with lower loan-to-value ratios are in the strongest position to negotiate or refinance.

For example, some lenders are offering sub-6% rates to borrowers with LVRs below 50% to 60%.

Traps to avoid

Focus on the comparison rate, not just the headline rate.

Be careful refinancing doesn't reset your loan term back to 30 years, which could increase total interest paid. If you're five years in, request a 25-year term.

Will rates fall in 2026?

For now, most forecasts suggest borrowers shouldn't expect relief anytime soon.

A Finder survey found 37% of economists expect the cash rate to rise further to 4.60% by year end, while 30% expect it to stay at 4.35%.

Major banks including CBA and NAB expect rates to hold through 2026 before cuts in 2027, although Westpac still predicts hikes later this year.

For borrowers, that means taking action now may be the fastest way to get relief.

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