Australian banks are stepping up their game, slashing fixed mortgage rates independently of the Reserve Bank of Australia (RBA), and homeowners could be the big winners.
In a surprising move, ANZ has lowered its 2-year fixed home loan rate to 5.39%, while BOQ and Police Bank made headlines by offering fixed rates at 4.99%—breaking through the psychologically important 5% barrier. These rates apply to owner-occupiers paying principal and interest.
Why does this matter?
A mortgage rate that starts with “4” has significant psychological appeal. It signals a new level of affordability and could prompt many homeowners to consider switching from variable to fixed-rate loans. However, there are pros and cons to locking in: while fixed rates offer certainty, they also mean you may miss out on future rate cuts.
What’s driving the cuts?
Even though the RBA held the official cash rate at 4.10% in April, many banks are responding to increased competition and customer expectations. More fixed rate cuts are likely, with the RBA predicted to lower the cash rate to 3.85% after their May meeting.
Adding fuel to the fire, CBA—the largest lender in Australia—recently dropped its variable rate to 5.84%, matching ANZ and Westpac. The offer, however, is limited to new digital-only loans with a 40% deposit requirement. Still, this move is a strong signal that other banks may follow suit.
How you can benefit
Even if you’re not a new customer, now is the time to review your home loan. Many banks will offer better rates to retain existing customers who show they’re shopping around. Use this moment as leverage—or better yet, speak to a qualified accountant or mortgage advisor to assess what options are best for your situation.
At Boa & Co. Chartered Accountants, we help clients across Australia—from families to business owners—make smarter financial decisions. Whether it’s understanding your mortgage, structuring your finances for tax efficiency, or exploring refinancing options, our team is here to help.
Call us today on 1300 952 286, email [email protected], or visit www.boanco.com.au to find out how we can support your financial journey.