How to cut your mortgage rate after RBA holds at June meeting

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

The RBA has held the cash rate at 4.35%, but Aussie homeowners may still be able to cut their mortgage repayments by negotiating a lower home loan rate or refinancing to a cheaper lender.

The decision, announced at the June board meeting in Sydney, marks the first pause this year after earlier rate hikes in February, March and May, leaving interest rates at their highest level since November 2011.

While there's no immediate relief from the Reserve Bank, borrowers don't have to wait. Many households are still paying above current market rates and could reduce their interest rate and monthly repayments by asking their lender for a better deal or switching loans.

How much could a lower rate save you?

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.

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.

RBA governor Michele Bullock said a further rate rise remains on the table.

"If we need to increase again, we will," she says.

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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