Banks Are Cutting Rates Without the RBA. What It Means for Your Investment Loan

The RBA held the cash rate at 4.35% on June 16. A week earlier, Macquarie had already cut its three-year fixed home loan rate by 0.5 percentage points. ANZ trimmed its two-year fixed rate by 0.1 percentage points in the same period.

If you are waiting for the RBA to cut before reviewing your investment property loan, you are watching the wrong signal.

Banks moved first. The RBA did not follow.

The fixed-rate cuts from Macquarie and ANZ came after a period where more than 80 lenders had spent the first months of 2026 pushing through rate increases. The reversal was sharp. But it was not universal. NAB and Westpac raised their fixed rates in the same 10-day window.

That split matters. When some lenders cut while others raise, it signals disagreement about where rates are heading. And when fixed-rate cuts appear ahead of a central bank decision, it is typically a sign that those lenders believe the rate cycle has peaked and rates are likely to be lower down the track.

Then CBA went further. In late June, the country's largest lender cut its variable mortgage rates by 5 to 8 basis points across its home loan products. Variable rate moves outside of an RBA decision are rare. CBA did not do this because it expected the RBA to cut. It did it because borrowers were disappearing.

Why lenders moved without the RBA

Two forces converged.

Mortgage demand collapsed. New data showed an 11% drop in mortgage applications in June 2026. When the pool of borrowers shrinks by that much, lenders compete on price to protect market share. CBA's variable rate reductions could force rivals to follow, putting pressure on bank profits across the sector.

Policy changes hit investor appetite. The Albanese government's changes to negative gearing and capital gains tax arrangements contributed to slowing housing demand, directly influencing lender pricing decisions. The decision to wind back tax breaks on property investment has already resulted in a sharp reassessment of the profitability of Australia's banks. Bank stock values pulled back over the past month, reflecting the market's view that easy gains from real estate lending may have come to an end.

For investors, the cause matters less than the effect: banks are pricing loans more aggressively right now because they need your business.

Where the cash rate sits, and the risk it goes higher

The RBA has already hiked the cash rate three times in 2026. Financial conditions tightened through the year before the June hold at 4.35%.

The hold was not a pivot. The Board explicitly stated it will do what it considers necessary to achieve its inflation outcome, including increasing the cash rate target further if required. The Board remains focused on ensuring inflation does not become embedded, and growth in demand needs to slow to reduce capacity pressures.

Westpac is the outlier among the big four, forecasting two more 25 basis point hikes in August and September, which would take the cash rate to 4.85%. If Westpac is right, variable rates go up again regardless of what CBA or Macquarie have done.

The next RBA cash rate decision is due August 11, 2026.

What the big four banks forecast for 2027

Rate cuts are unlikely in 2026. Three of the four major banks expect relief by mid-2027.

CBA has officially declared the end of the rate-hiking cycle with two cuts scheduled for next year. ANZ expects the RBA to sit on its hands for a while before cutting. NAB is the most dovish, forecasting three cuts that would bring the cash rate to 3.60% by the end of 2027.

The spread between the most bullish (NAB at 3.60%) and most bearish (Westpac at 4.85%) forecast is 125 basis points. That range tells you how uncertain the outlook is.

What this means for your investment property loan right now

The bank-level rate moves matter more in the short term than the RBA cash rate. Here is how to think about your position.

If you are on a variable rate: CBA has already cut by 5 to 8 basis points. If your lender has not matched, that is a negotiation point or a reason to look at refinancing your investment property. Lenders fighting for a shrinking borrower pool are more willing to negotiate on rate and fees than they were six months ago.

If you are considering fixing: Macquarie's three-year fixed rate dropped by half a percentage point. That is a material move. But NAB and Westpac moved fixed rates in the opposite direction during the same period. The spread between the cheapest and most expensive fixed rate on the market right now is wider than usual, which means comparing investment property loan offers is more important than picking a product type.

If you are weighing fixed vs variable: The choice depends on whether you think Westpac (two more hikes) or CBA (no more hikes, cuts next year) has the better read. If you want to understand the trade-offs in detail, our breakdown of interest only vs principal and interest for investment property covers the repayment structure side of that decision.

If you are doing nothing: Doing nothing is a decision. If you locked in a fixed rate two years ago, it will roll off onto a variable rate that reflects three RBA hikes this year. Check what your revert rate is and compare it to what lenders are offering new borrowers. The gap is often several tenths of a percent.

The property market behind the rate moves

Banks are not cutting rates in a vacuum. The RBA itself noted that momentum in the housing market has shifted, with housing prices falling in some capital cities. Property markets in Sydney and Melbourne were grinding lower even before the budget, with gains also slowing in Perth and Brisbane.

The 11% drop in mortgage applications is the number that connects the rate story to the property story. Fewer buyers means less competition for properties but also less lending revenue for banks. That dynamic is what drove the bank rate cuts, and it is also what creates opportunity for investors who are positioned to move while others sit out.

The negative gearing and CGT changes have structurally changed investor appetite. If you want to understand how those reforms affect your numbers, we have detailed guides on the negative gearing changes and CGT changes for property investors.

FAQ

Are banks cutting interest rates in Australia in 2026?

Some banks are. Macquarie cut its three-year fixed rate by 0.5 percentage points and ANZ trimmed its two-year fixed rate by 0.1 percentage points ahead of the June 2026 RBA meeting. CBA cut variable rates by 5 to 8 basis points in late June. But other lenders, including NAB and Westpac, raised fixed rates in the same period.

Will the RBA cut rates in 2026?

Rate cuts are unlikely in 2026. The RBA held at 4.35% in June after three hikes this year and left the door open to further increases. Three of the four major banks expect the first RBA cut in mid-2027, with NAB the most optimistic at three cuts bringing the rate to 3.60% by end of 2027.

Should I fix my investment property loan now?

It depends on your view of where rates are heading. Some lenders have cut fixed rates, signalling they believe the cycle has peaked. Others have raised them. The spread between the cheapest and most expensive fixed rate is wider than usual, so comparing multiple lender offers is more important than the fix-or-float decision itself.

Why did CBA cut variable rates without an RBA cut?

CBA cut variable rates because mortgage applications dropped 11% in June 2026. With fewer borrowers in the market, partly due to the negative gearing and CGT policy changes, CBA sharpened its pricing to protect market share. The move could force rival lenders to follow.