Introduction
2026 has arrived, and with it, cautious optimism for Australian borrowers. After years of rate hikes followed by steady cuts, the Reserve Bank of Australia (RBA) is now forecasting further easing throughout the year.
For homeowners, first home buyers, and investors in Sydney, Melbourne, Brisbane, Perth, Adelaide, Hobart, Canberra, and Darwin, this could mean significant savings — but only if you take proactive steps to ensure your bank passes on the benefits.
What the RBA Forecasts Mean
- Westpac economists predict up to four cash rate cuts in 2026.
- The cash rate could fall to around 3.6% by year’s end.
- If fully passed on, the average variable owner-occupier rate could drop to 5.25% or lower.
- Fixed rates have already fallen below 5%, with BOQ at 4.89% leading the charge.
This combination of falling rates and heightened lender competition creates an opportunity-rich environment for borrowers.
Potential Savings
On a $600,000 loan over 25 years:
- At 6%, repayments = $3,865/month
- At 5.25%, repayments = $3,586/month
- At 4.89%, repayments = $3,482/month
That’s $383/month saved, or $4,600 annually — money that can be redirected toward savings, investments, or family goals.
Capital City Impacts
- Sydney: High mortgages magnify the impact of even small cuts.
- Melbourne: Refinancers stand to benefit from cashback deals as banks fight for market share.
- Brisbane: Lower rates improve first home buyer serviceability.
- Perth: Equity growth supports refinancing at competitive rates.
- Adelaide: Sub-5% rates combine with affordability to make ownership easier.
- Hobart: Slower property growth highlights the importance of reducing loan costs.
- Canberra: Public sector incomes strengthen approval rates in a falling-rate market.
- Darwin: Regional borrowers need broker guidance to find competitive niche lenders.
Who Should Be Reviewing Their Mortgage in 2026?
- Separated Borrowers Refinancing into one name is easier with lower rates and improved serviceability.
- First Home Buyers Sub-5% fixed rates and government guarantees make 2026 a prime entry point.
- Refinancers Anyone paying above 6% is likely overpaying thousands each year.
- Investors Investor loan costs are narrowing compared to owner-occupiers, making it an attractive year to re-enter the market.
Risks to Watch
- Banks not passing cuts in full — ASIC reviews show this is a persistent issue.
- Hidden fees — Comparison rates may still sit higher than advertised.
- Cashback withdrawal — Many lenders pull promotional offers once demand spikes.
Real Client Story: Daniel & Priya in Melbourne
“We refinanced at 6.1% last year, but our broker reviewed our loan in January 2026. We switched to a 4.95% fixed deal and are now saving $350 a month. It’s given us confidence to plan a family holiday.”
The Broker Advantage in 2026
- 50+ lender access — ensuring you’re not limited to one bank’s decision.
- Strategic advice — whether to fix, float, or split.
- Government scheme knowledge — from first home guarantees to stamp duty concessions.
- Compliance & protection — ensuring lenders act in your best interest.
Practical Steps for Borrowers This January
- Check your rate — if it’s above 6%, you’re overpaying.
- Ask your bank — are they passing on RBA cuts in full?
- Book a review — brokers can compare offers quickly.
- Plan ahead — align your mortgage with 2026 goals, whether that’s paying down debt, buying a new home, or refinancing after separation.
📅 Book Your Free, No-Obligation Chat
At Money Tree Mortgage Brokers, we help Australians navigate RBA rate shifts with confidence. From comparing 50+ lenders to structuring your loan around your financial goals, our role is to ensure you don’t miss out on savings in 2026.
