Sub-6% rates flood the market after RBA rate cut
Following the latest decision of the Reserve Bank of Australia (RBA) to reduce the cash rate, mortgage rates across the country have dropped to their lowest levels since early 2023, with sub-6% offers becoming more widespread.
Analysis by comparison website Finder shows the most competitive variable mortgage rate currently available is 5.13%, though this is limited to certain green homes. The lowest fixed rate stands at 5.14% for a three-year term, contingent on borrowers confirming the property is fully electric.
For most eligible borrowers, the most accessible variable rate starts at 5.59%.
Since the RBA cash rate cut, all but around 30 lenders in Australia have reduced their variable mortgage rates. This reflects a highly competitive lending environment, with many financial institutions eager to pass on the full benefit of the RBA’s decision.
Economists widely predict that the RBA may implement at least one more cut this year, potentially trimming the cash rate by an additional 25 basis points.
Graham Cooke (pictured above), Finder’s head of consumer research, said the lower rates are drawing strong interest from borrowers.
“Mortgage rates are coming down, and borrowers are ready to pounce on cheaper deals,” Cooke said. “What’s really impressive is that every single bank who has announced new rates since the RBA decision has passed on the full rate cut – showing how competitive the market is. This means that right now, the power is with the borrower to get a better deal.
“If your lender hasn’t dropped their rates yet – that’s a red flag. Another, cheaper, lender will be willing to snap up your business. Having access to a wide range of lenders significantly increases the chances of securing the best deal.”
Cooke also advised borrowers to carefully consider their timing before committing to fixed rates.
“With further rate cuts on the horizon, locking in now could mean leaving money on the table,” he said.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
