# Lenders trim variable rates days before the June Reserve Bank meeting

Eleven lenders, Bank of Queensland and Queensland Country Bank among them, have cut variable rates since the May rise. Forty now advertise a rate under 6 per cent.

---


Home loan rates are meant to follow the cash rate up. Over the past six weeks a group of lenders has gone the other way. Canstar reported on Thursday 11 June 2026 that eleven lenders had cut at least one variable rate since the Reserve Bank's increase in May, and it named two Queensland institutions among them: Bank of Queensland and Queensland Country Bank. ING and Community First were the others it singled out.

The cuts arrive four days before the Reserve Bank's Monetary Policy Board announces its next decision, on Tuesday 16 June. They are small, they are aimed mostly at new customers, and they do not undo three increases in the cash rate this year. They do change what a Queensland borrower should expect to be offered when a loan comes up for review.

<div class="keyfacts">
<div><b>40</b><span>lenders with a variable rate under 6%</span></div>
<div><b>5.69%</b><span>lowest owner-occupier variable rate</span></div>
<div><b>6.26%</b><span>average owner-occupier variable rate</span></div>
</div>
<p class="src">Canstar database, as published on 11 June 2026. Variable rates for owner-occupiers.</p>

## What Canstar found

Canstar tracks the advertised rates of the lenders on its database. Its count on 11 June showed an average variable rate of 6.26 per cent for owner-occupiers and a lowest rate of 5.69 per cent, a gap of 0.57 of a percentage point between the typical loan and the cheapest one. Forty lenders were advertising at least one owner-occupier variable rate below 6 per cent.

For investors the average variable rate was 6.50 per cent and the lowest 5.85 per cent, with 45 lenders offering a rate under 6.25 per cent. Among fixed loans, the lowest one-year rate for an owner-occupier was 5.99 per cent.

The list of lenders under 6 per cent has a strong Queensland flavour. Alongside national names such as Westpac, ING and HSBC it includes RACQ Bank, Heritage Bank and People First Bank, as well as a long run of customer-owned banks from other states. A borrower in this state does not need to leave the local market to find one of the cheaper rates.

Sally Tindall, Canstar's data insights director, added a caution that is worth repeating. The sub-6 per cent rates exist, she said, but a borrower may have to become a new customer to get one. Lenders commonly price their sharpest rates for new business, and an existing customer on an older loan does not receive them automatically.

## Why cut when the cash rate has gone up

A lender's variable rate is its own decision. The cash rate influences what a bank pays for money, and since February each increase has been passed on to existing variable borrowers. What a bank charges a new customer is set by something else as well: how badly it wants the loan.

Two things have happened to that appetite since autumn. The first is that fewer people are applying. The Adviser reported on 12 June that Westpac received about 30,000 new mortgage applications in its third quarter, down from 33,000 in the quarter before, and about 27,000 at the pace seen since the federal Budget. Its head of consumer banking, Carolyn McCann, was reported as describing a 20 per cent fall in investor loan applications over three weeks. ANZ's chief executive, Nuno Matos, was reported in the same article as saying he had no doubt the mortgage market would slow.

The second is that lenders still have targets. When fewer applications arrive, the quickest way to win a larger share of them is price. A cut of 10 or 15 basis points on one product, offered to new borrowers with a solid deposit, costs a bank little across its whole book and can move it up the comparison tables. That is what an out-of-cycle cut is: a change a lender makes between Reserve Bank decisions, for its own commercial reasons.

Fixed rates tell a similar story. Savings.com.au reported on 5 June that several lenders had lowered fixed rates while others raised them. ANZ trimmed selected fixed rates by 5 to 10 basis points, taking its lowest two-year rate for owner-occupiers to 6.29 per cent, and P&N Bank and BCU Bank cut one and two-year rates by up to 0.25 of a percentage point. Westpac moved the other way, lifting fixed rates by 5 basis points. Macquarie's lowest fixed rate was reported at 6.09 per cent for three years, for owner-occupiers with a loan of 70 per cent or less of the property's value.

## What the gap is worth on a Queensland loan

The distance between the average and the cheapest rate is the figure that matters to a household, more than any single lender's move. The worked example below is illustrative. It takes a $600,000 principal and interest loan over 30 years, the loan size Canstar uses in its own examples, and applies the two rates Canstar published.

At 6.26 per cent the monthly repayment is about $3,698. At 5.69 per cent it is about $3,479. The difference is about $219 a month, or roughly $2,600 a year, before any fees for switching.

That saving is not free. Moneysmart, the government's consumer finance site, lists the costs a borrower should check before moving: a discharge fee to close the old loan, an application fee for the new one, a break fee if the old loan is fixed, and lenders mortgage insurance if the borrower owns less than 20 per cent of the home. It also suggests the first step is to tell the current lender, which may lower the rate to keep the customer.

<div class="callout"><span class="mono">Before switching</span><h4>A lower rate still has to pass the lender's test</h4>
<p>A new lender assesses a refinance as a new loan, at a rate 3 percentage points above the one it will charge. A household that borrowed near its limit before this year's rate rises may not qualify elsewhere, and asking the existing lender for its new-customer rate is then the practical route.</p>
</div>

## Where the banks think rates go next

The cuts are also a bet on what the Reserve Bank does. Canstar set out the four major banks' forecasts as they stood on 11 June, and they disagree more than usual.

<figure class="fig"><figcaption><b>The big four on the cash rate</b><span>Forecasts as at 11 June 2026; the cash rate is 4.35%</span></figcaption>
<div class="scroll"><table class="tbl">
<thead><tr><th>Bank</th><th>Next move expected</th><th>Cash rate at end of 2027</th></tr></thead>
<tbody>
<tr><td>Westpac</td><td>A rise in August 2026</td><td>4.85%</td></tr>
<tr><td>ANZ</td><td>No change</td><td>4.35%</td></tr>
<tr><td>CBA</td><td>A cut in May 2027</td><td>3.85%</td></tr>
<tr><td>NAB</td><td>A cut in the June quarter of 2027</td><td>3.60%</td></tr>
</tbody>
</table></div>
<p class="src">Major bank economists' forecasts as compiled by Canstar, 11 June 2026. Forecasts are opinions and change often.</p></figure>

The range runs from 3.60 per cent to 4.85 per cent, a spread of 1.25 percentage points between the lowest and highest view of where the cash rate will be at the end of next year. Canstar itself described a pause at the June meeting as near certain.

Canstar also worked out what Westpac's scenario would cost. One more increase of 0.25 of a percentage point in August would add about $92 a month to repayments on a $600,000 loan, and would bring the total added by this year's increases, February, March, May and August together, to about $364 a month.

For a lender, the split matters because fixed rates are priced on where money markets expect rates to be over the next one to five years. A lender that believes the peak has been reached can afford to cut a fixed rate now. One that expects more increases will hold or lift. That is why the same week can bring cuts from one bank and rises from another.

## What Queensland borrowers can take from it

Three practical points follow from the figures, none of them advice for a particular household.

A loan's rate drifts away from the market if nobody looks at it. The average sits more than half a percentage point above the cheapest, and the cuts of the past six weeks were made for new customers. A borrower who has not checked their rate since before February is likely to be paying the old rate plus three increases, with no discount for loyalty.

The Queensland lenders are in the contest. Bank of Queensland and Queensland Country Bank have both cut since May, and RACQ Bank, Heritage Bank and People First Bank are on the under-6 per cent list. For a regional borrower who prefers a lender with a local branch, the cheaper end of the market is not confined to online names.

The advertised rate is only the start of a comparison. Moneysmart points borrowers to the comparison rate, a single figure that combines the interest rate with most fees, and to the features attached to a loan. The cheapest variable rates are often basic products without an offset account, and a household that keeps substantial savings may be better served by a slightly higher rate with one.

## What comes next

The Monetary Policy Board meets on Monday 15 and Tuesday 16 June and announces its decision on the Tuesday afternoon. A hold would leave lenders free to keep competing on new-customer rates. An increase would be passed on to existing variable borrowers within weeks, as the three earlier ones were, and would test whether the lenders that have cut are willing to absorb any of it.

Either way the pattern of the past six weeks is a reminder of how the market works. The Reserve Bank sets the direction. Each lender then decides, product by product, how much of its margin it is prepared to give away to win a customer, and the customers most likely to benefit are the ones who ask.