Introduction
After years of soaring mortgage rates, Australians are finally seeing relief. In 2026, a growing number of lenders are offering fixed rates under 5%, marking a turning point for homeowners and first home buyers. But which banks are leading this race, and what does it mean for you?
Whether you’re in Sydney, Melbourne, Brisbane, Perth, Adelaide, Hobart, Canberra, or Darwin, understanding which lenders are most competitive can help you save thousands on your mortgage.
The Sub-5% Club
According to recent market updates:
- BOQ remains the leader with a two-year fixed rate at 4.89% for eligible borrowers.
- NAB and ANZ have matched each other at 5.19%, narrowing the gap with second-tier lenders.
- Westpac has joined the race, trimming rates to remain competitive.
- Over 18 lenders nationwide now offer at least one fixed product under 5%.
Why This Matters
Even a small reduction in rates translates into big savings.
Example: $600,000 loan over 25 years
- At 6% → $3,865/month
- At 5.19% → $3,565/month
- At 4.89% → $3,482/month
That’s $383/month saved or $4,596/year — and over $100,000 across the life of the loan.
Big Four vs Second-Tier Lenders
- Big Four Banks (NAB, ANZ, Westpac, CBA): Increasingly competitive, especially with two-year fixed products.
- Second-Tier Lenders (BOQ, Macquarie, Bendigo): Still leading with the sharpest headline rates.
- Credit Unions & Mutuals: Many offer low sub-5% rates, often with fewer fees, but eligibility can be stricter.
Capital City Impacts
- Sydney: High loan balances mean sub-5% rates deliver the biggest dollar savings.
- Melbourne: Competitive landscape drives attractive cashback deals for refinancers.
- Brisbane: Popular with first home buyers leveraging government schemes.
- Perth: Rising property values strengthen equity positions, improving refinance options.
- Adelaide: Affordable market pairs well with lower rates for faster ownership.
- Hobart: Smaller loans still benefit proportionally from rate reductions.
- Canberra: Public sector borrowers enjoy stability and strong approval odds.
- Darwin: Regional borrowers benefit from brokers comparing lenders with niche policies.
Real Client Story: Alex in Sydney
“My bank hadn’t moved my variable below 6%. My broker compared lenders and found BOQ’s 4.89% fixed. I refinanced, and now I’m saving nearly $400 a month — money I’m putting toward my kids’ school fees.”
The Hidden Side of Sub-5%
Not all sub-5% products are created equal:
- Some require 20% deposits.
- Others exclude features like offset accounts.
- Cashback offers may not apply.
- Comparison rates may still be higher due to fees.
This is why simply chasing the lowest rate can backfire.
How Brokers Help Borrowers Navigate
- Compare 50+ lenders beyond the big four.
- Explain conditions like LVR limits and eligibility.
- Secure features such as offset accounts and redraw flexibility.
- Negotiate with banks to ensure cuts are passed on.
Practical Steps for Borrowers in 2026
- Check your current rate — if it’s above 6%, you’re overpaying.
- Compare lenders — but don’t stop at the headline rate.
- Consider your goals — stability (fix) vs flexibility (variable).
- Work with a broker — to unlock savings without the hassle.
📅 Book Your Free, No-Obligation Chat
At Money Tree Mortgage Brokers, we help borrowers unlock the best sub-5% deals in Australia. Whether you’re refinancing, buying your first home, or navigating separation, we’ll compare 50+ lenders and ensure you get the features and savings you deserve.
Don’t leave thousands on the table — let’s find your best option today.
