The Big Four Can't Agree on Rates. 18 Lenders Have Already Cut Theirs.

Australia's major banks are publicly split on whether the cash rate goes up or stays put. Meanwhile, 18 lenders have quietly reduced their rates since the RBA's last hike in May.

The cash rate sits at 4.35 per cent after three increases this year. The RBA held in June but kept the door open for further tightening. Inflation came in at 4.2 per cent in April, down from 4.6 per cent in March, but still above the RBA's 2 to 3 per cent target band.

The big four can't agree

Westpac stands alone, forecasting rate hikes in August and September. CBA, NAB, and ANZ all expect the cash rate to hold through the rest of 2026, with cuts not expected before May 2027 at the earliest. NAB went further in June, formally reversing its earlier call for an August hike, citing a softening economic backdrop and slowing GDP growth.

That 3-to-1 split is unusual. And while the banks debate direction, a different story is playing out in the lending market.

18 lenders made their move

According to data from The Adviser and Canstar, 18 lenders have reduced at least one variable rate since the May rate rise. Forty lenders now hold variable rates below 6 per cent. Bendigo Bank dropped its variable rate by 0.15 percentage points to 5.89 per cent. AMP Bank cut fixed rates by up to half a percentage point. Smaller lenders like LCU and Pacific Mortgage Group are posting variable rates around 5.69 per cent.

None of this is a response to a rate cut. The RBA hasn't moved. This is competition.

"I think it's more a competitive thing. They're chasing deals," Kirsty McKinnon, director of Flair Finance, told The Adviser.

The visible rate cuts are concentrated in home lending, but the competitive dynamics don't stop there. Car loans, equipment finance, personal loans, and business lending all sit within the same funding environment. When lenders compete harder in one segment, pricing pressure tends to spread.

What to do

The split among the majors works in your favour right now, specifically because it creates uncertainty. When banks disagree about the direction, lenders compete harder for business. That competition is measurable: 18 rate cuts in two months, with no signal from the RBA.

If you have an existing loan, check what your current rate is against what your lender is offering new customers. Many of the recent cuts apply only to new borrowers. If your lender is advertising 5.89 per cent to new customers while you're paying 6.50 per cent, that gap is a specific number you can negotiate with, or a clear reason to move.

Do it before the August RBA meeting. If the RBA holds, lenders may tighten their offers once the uncertainty clears. If they hike, the competitive window closes faster. Either way, the current disagreement among the majors is what's creating the opportunity.

This article is general information only and is not financial advice.