It’s a Borrower’s Market: Why Now Could Be the Right Time to Chase a Lower Rate

If you’ve got a home loan and haven’t looked at your rate lately, now is a good time to start. The mortgage market is shifting in the borrower’s favour, and the numbers coming out of Australia’s biggest banks tell the story clearly.

All four major banks have now confirmed that demand for home loans has softened, as smaller and mid-sized lenders sharpen their pricing to win market share.

ANZ revealed that since the May 2026 federal budget, borrowers have been applying for smaller mortgages, the average dollar value of loan applications between mid-May and the end of July was 12% lower than earlier in the year. That came just a day after Commonwealth Bank, while posting an $11 billion profit, reported a 15% drop in mortgage applications over the same period. NAB and Westpac told a similar story, with NAB reporting a 15% fall in home loan applications in the three months to June.

Two things are driving this cooling in demand: the May budget wound back tax concessions for property investors, and three interest rate hikes since February pushed up borrowing costs across the board.

The Reserve Bank has now held the cash rate steady at 4.35% at both its June and August 2026 meetings, following that run of hikes earlier in the year. The decision was unanimous and in line with market expectations, though RBA Governor Michele Bullock has flagged that underlying inflation remains too high and it’s still unclear whether this year’s hikes have done enough to bring it back under control.

That uncertainty at the top hasn’t stopped competition breaking out further down the market. Canstar research has found that almost 50 lenders now offer a variable home loan rate below 6% p.a., and brokers are reporting a steady stream of lenders trimming both variable and fixed rates to attract new customers.

The catch, according to Canstar, is that these sharper rates are generally reserved for new customers rather than existing ones. If you’ve been sitting on the same rate for a while, your bank isn’t likely to hand you a discount – you have to ask for it or be prepared to walk.

Lenders don’t cut rates out of generosity, they cut them because they need new business, and a borrower’s market is exactly the leverage point where a phone call, a conversation with your broker, or a refinance application can pay off. A few reasons this window is worth acting on now:

• Softening demand means lenders compete harder: When application volumes fall, banks compete harder on price to keep the pipeline moving.
• Rate holds create a natural pause point: With the cash rate steady rather than moving, it’s easier to compare offers without the ground shifting under you.
• Existing customers are often the last to benefit: Sharper rates tend to go to new-to-bank borrowers first, which is precisely why a review or refinance can unlock savings that loyalty alone won’t.
• Even a modest rate cut adds up: On a typical mortgage, shaving even 0.25 – 0.50 percentage points off your rate can mean thousands of dollars in savings over the life of the loan.

Here at APP Finance Brokers, we believe you don’t need to wait for the RBA to move to get a better deal. Two paths are worth considering – and we can assist you with both:

1. Negotiate with your current lender: Ask directly for a rate review – banks would often rather reprice an existing loan than lose the customer altogether.
2. Refinance to a more competitive lender: With dozens of providers now offering rates under 6%, switching could deliver a meaningful reduction in repayments, particularly if you haven’t reviewed your loan in the past 12-18 months.

Either way, it pays to know exactly where your loan sits against what’s currently on the market, and whether the fees, features, or fixed-versus-variable structure of a new deal stack up for your situation.

This is exactly the kind of market where we can add value to your current loan situation. At AAP Finance Brokers, we compare your current loan against the wider market, handle the negotiation or refinance process on your behalf, and make sure any switch genuinely leaves you better off once fees and features are accounted for.

If it’s been a while since you checked your rate, now is a good time to find out what’s possible. Get in touch with the team at AAP Finance Brokers for a free home loan health check. Call 1300 141 453