Australia’s mortgage landscape is shifting - fast. In just the past week, seven major lenders have trimmed their fixed rates by an average of 0.3 percentage points, signalling growing confidence that the Reserve Bank of Australia (RBA) will begin cutting the official cash rate sooner than many expected.
What’s Happening in the Market
According to Canstar data, lenders including Macquarie and National Australia Bank have repriced their fixed loan offerings, with many two- and three-year fixed loans now sitting a full percentage point below standard variable rates.
That’s the equivalent of four quarter-point rate cuts - a significant advantage for borrowers weighing their next move.
Market forecasts suggest the cash rate will fall from 4.35% to around 3.6% by October 2025, creating a compelling environment for strategic refinancing and rate positioning.
The Refinancing Revival
Canstar’s data insights director Sally Tindall says these rate cuts are “reviving interest in refinancing, which had been losing steam since mid last year.”
For borrowers feeling the pressure of higher repayments, this marks a genuine opportunity for immediate relief.
Finspo CEO Angus Gilfillan adds perspective:
“Given so many people are doing it tough and the cost of their home loan has gone up so much, fixing a portion of your loan can be a really good strategy to get a saving straight away while still benefiting from any future rate cuts.”
Our Take: Strategy Over Guesswork
At Shaper Finance, we’re seeing a surge in clients looking to capitalise on these rate movements. But it’s not just about chasing the lowest rate — it’s about positioning your mortgage strategically for the cycle ahead.
A split loan strategy can make sense right now:
Fix part of your mortgage at today’s reduced rates, and keep part variable to capture future RBA cuts.
For a $600,000 mortgage, the difference between current variable rates (around 6.2%) and the best fixed rates (now under 5.5%) could save roughly $350 per month — more than $4,000 per year in reduced repayments.
What This Means for Different Borrowers
First Home Buyers
You’re entering at a rare moment — fixed rates below variable rates don’t happen often. This could be the window to lock in lower repayments while building equity early.
Existing Homeowners
If you haven’t reviewed your mortgage lately, now’s the time. The gap between your current rate and market-leading fixed offers could be thousands of dollars annually.
Investors
For property investors, reduced fixed rates improve cash flow predictability and budget certainty — both vital for long-term planning.
Looking Ahead: The Timing Window
While the RBA insists it’s not anticipating “near-term” cuts due to sticky inflation, global signals tell a different story.
Central banks in Canada and New Zealand have already begun easing aggressively, and market pricing suggests Australia could follow suit in early 2025.
This creates a rare dual opportunity:
- Secure immediate savings through lower fixed rates.
- Stay flexible to benefit when variable rates fall.
What Borrowers Should Do Next
- Review your current mortgage — Compare your rate against today’s best offers.
- Consider a split strategy — Fix part, keep part variable.
- Account for all costs — Break fees, setup fees, and ongoing costs matter.
- Act with intent — The best fixed rates may not last long.
The market is quietly turning — and for the first time in years, borrowers have the upper hand.
The key isn’t chasing the lowest headline rate. It’s making informed, well-timed moves that align with your goals, cash flow, and confidence in where rates are heading next.
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