How to get two interest rate cuts without waiting for the RBA

Home owners can access the equivalent of two rate cuts without waiting for the Reserve Bank (RBA) to move by simply refinancing to a cheaper home loan, analysis shows.

Hopes of a rate cut in November were dashed by banks and economists following the release of the latest inflation figures on Wednesday.

NAB has revised its forecast, predicting a rate cut in May 2026, while CBA released a statement saying there would be no cut in the foreseeable future.

CBA head of Australian economics, Belinda Allen, says the RBA will want to keep the cash rate in “slightly restrictive territory”.

“Given the material upside surprise to the quarter three CPI, and the broad‑based nature of pricing pressures, we now expect the RBA to remain on hold from here,” says Allen.

“Previously we expected one last rate cut in February 2026 to bring the cash rate back closer to neutral.”

But by refinancing to a cheaper home loan, the average mortgage holder could lower their rate by more than 0.50 per cent – the equivalent of more than two cuts – without waiting until 2026.

The average Aussie home owner has an interest rate of 5.54 per cent on their home loan, but the lowest rates on the market are 4.99 per cent for first-home buyers and 5.14 per cent for everyone else, according to Finder.

Based on those rates, a mortgage holder could save $2270 a year by switching to the cheapest rate on the market.

“These aren’t hypothetical savings – they are real-world rate cuts that home owners can unlock today by simply switching to a cheaper lender,” says Graham Cooke, head of consumer research at Finder.

The average Australian home loan is $678,010, according to the Australian Bureau of Statistics (ABS). Switching to the lowest market rate for existing home owners – 5.14 per cent – could save mortgage holders $2275 a year. 

First-home buyers with an average $554,961 home loan could save $2774 a year by switching to the cheapest loan of 4.99 per cent, according to Finder data.

The bigger the loan, the more Aussies can save by switching, says Cooke.

“For those with a $1 million mortgage, the annual savings jump to more than $4000 for first-home buyers who refinance that first loan.

“Even if this isn’t your first home, you are looking at more than $3300 in savings on a $1 million loan.”

Compared to applying for a home loan for the first time, refinancing to a better or cheaper rate is more straightforward, Cooke says.

“If you contact the new lender and you find a rate you’re happy with, they can generally handle everything. The whole system now is set up so it is easy to transfer from one to the other in the home loan industry.”

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Cooke says bank loyalty will cost mortgage holders in the long term because newer customers tend to get better deals, so he suggests switching lenders every couple of years.

Mortgage broker Olivia Burton from Olivia the Broker says people shouldn’t sit and forget their home loan.

“People don’t prioritise making these [home loan] changes. It’s the same as when you can shop around for a better electricity plan,” she says.

Another way to save on interest is by choosing a loan that includes an offset account to help lower the interest paid each month, Burton says.

“Each day that your money is in your offset account means that you’re getting charged less interest. Then that kind of snowballs, because if your repayments are actually staying the same, but your interest part of those repayments is lower, it means you’re paying the loan off quicker.”

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The next RBA meeting is on November 4.

Westpac’s chief economist, Luci Ellis, says a rate cut, even in February 2026, looks unlikely.

“A February cut is far from certain now, given the size of the upside surprise this quarter,” she says.

Cooke points out that if a home owner were to refinance before the next interest rate cut, it’s possible they could get the equivalent of three rate cuts when the RBA cuts again in 2026.

“If you switch to a lower rate when the rate cuts, you’ll still be at a lower end, because everybody will move the same amount from there,” says Cooke.

“In previous years, I would have been talking to you about the likelihood of some lenders passing on more of the rate cuts. But this year, after all three rate cuts, we’ve seen basically all lenders pass on the full rate cut to all their consumers.”

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