Introduction
2026 is shaping up to be a pivotal year for Australian borrowers. With the Reserve Bank of Australia (RBA) expected to cut rates multiple times, major banks like NAB and ANZ trimming fixed products, and smaller lenders undercutting them with sub-5% rates, the mortgage market is more competitive than it has been in years.
For borrowers in Sydney, Melbourne, Brisbane, Perth, Adelaide, Hobart, Canberra, and Darwin, this outlook provides both opportunities and challenges. The key is knowing how to position yourself to benefit.
The Big Picture for 2026
- Westpac forecasts up to four RBA cuts, with the cash rate potentially dropping to 3.6%.
- BOQ’s 4.89% two-year fixed remains the market leader.
- 18+ lenders now offer fixed rates under 5%, creating unprecedented choice.
- Investor lending is rising, narrowing the gap with owner-occupier loans.
- ASIC continues to hold banks accountable, from offset accounts to hardship support.
Key Trends Borrowers Should Watch
1. Falling Rates, Rising Competition
Borrowers will enjoy lower repayments, but lenders will also compete fiercely to attract new customers.
2. Cashback Offers Under Review
Some lenders may phase out cashbacks as volumes increase.
3. More Flexible Loan Products
Split loans, eco-loans, and niche products for separated borrowers or business owners are expected to expand.
4. First Home Buyer Support
Schemes like the First Home Guarantee remain central to affordability, alongside state stamp duty reforms.
Capital City Impacts
- Sydney: Sub-5% rates provide much-needed relief for large mortgages.
- Melbourne: Competitive lender environment creates opportunities for refinancers.
- Brisbane: Strong affordability attracts first home buyers and investors.
- Perth: Equity growth supports refinancing and property settlement strategies.
- Adelaide: Sub-5% deals make ownership more accessible for single-income households.
- Hobart: Slower growth but continued reliance on grants and offsets.
- Canberra: Public sector stability pairs well with competitive products.
- Darwin: Regional lenders offer flexible structures for niche borrowers.
What This Means for Borrowers
For First Home Buyers
Lower rates and government schemes make 2026 one of the best years in recent memory to buy. But limited scheme places mean acting fast is key.
For Refinancers
If you’re still paying above 6%, you’re overpaying thousands each year. Sub-5% refinancing can provide immediate relief.
For Separated Households
Property settlements are easier to manage with lower repayments and flexible refinancing policies.
For Investors
Lower rates improve returns, while narrowing lending gaps between investors and owner-occupiers create opportunities to re-enter the market.
Real Client Story: Matt in Adelaide
“I’d been putting off refinancing, thinking the savings wouldn’t be worth it. My broker showed me a 4.95% fixed rate, cutting my repayments by $280 a month. That’s $3,300 a year — money I’m now using to renovate.”
Practical Example of Savings
On a $700,000 mortgage:
- At 6% = $4,508/month
- At 5.19% = $4,184/month
- At 4.89% = $4,065/month
That’s a $443/month saving, or $5,316 a year — money that can change a family’s financial trajectory.
How Brokers Help in 2026
- Compare 50+ lenders to find the best sub-5% deals.
- Tailor strategies to each borrower’s situation — separated, first home, investor.
- Navigate schemes like the First Home Guarantee or stamp duty concessions.
- Negotiate with banks to pass on full RBA cuts.
- Protect borrowers against misconduct, hidden fees, and poor hardship support.
Why Acting Now Matters
- Sub-5% rates won’t last forever — as demand rises, lenders may tighten criteria.
- Cashback incentives may vanish.
- RBA cuts may not always be passed on in full, so refinancing early ensures immediate savings.
📅 Book Your Free, No-Obligation Chat
At Money Tree Mortgage Brokers, we help Australians seize opportunities in the 2026 mortgage market. From sub-5% refinancing to first home buyer schemes and separation strategies, we’ll compare 50+ lenders and tailor the right solution for your financial goals.
Don’t just watch the market shift — let’s make it work for you.
