3 ways to beat your bank and give yourself a rate cut
Key takeaways
- The Reserve Bank's latest cash rate increase is proving very expensive for Australian borrowers.
- But you don't have to take rate rises lying down. There are several ways you can effectively give yourself a rate cut.
- What's next: Compare rates and switch, negotiate with your lender, or make your home loan work harder for you.
Last week, the Reserve Bank of Australia took interest rates to highs we have not seen in 15 years.
This is really painful for Australian borrowers. Finder research suggests the average borrower is now paying around $420 more each month than they were at the start of the year.
That's the result of four rate rises in 2026.
While it's impossible for borrowers on variable rate loans to avoid rate hikes at the moment, there's a lot you can do to soften the blow.
Here are three tips to get yourself a rate cut.
1. Compare rates and switch
After the RBA's rate hike last week, almost every borrower with a variable rate home loan is getting a 25 basis point rate hike.
However, if you compare rates between different lenders, you could find a rate that's still significantly better than your current one.
A quick analysis of Finder's home loan rate database found that there's a gap of more than 70 basis points between the cheapest rates offered by different lenders.
So comparing home loan rates and refinancing could more than offset the rate rise.
2. Ask your lender for a lower rate
Let's say you've found a low rate with a new lender. Before you make the switch, there's one more thing you could try: calling up your current lender.
It's always worth trying to negotiate with your lender to see if they can offer you a lower rate or a better deal. They may match the better offer you found elsewhere, or they may have a lower rate that they're offering to new customers, which they might move you onto.
The worst your lender can do is say no, and if that's the case, you can refinance to the new cheaper loan and give yourself a rate cut.
3. Make your loan work for you
Another option is to stick with your current home loan but make it work harder for you.
Make fortnightly repayments
If you are making monthly repayments on your home loan, switching to fortnightly repayments effectively helps you pay the loan off faster and pay less interest.
It's a simple mathematical trick. There are 12 months in a year, but there are 26 fortnights, (not 24) so you're paying off the loan faster without even realising.
Use your offset account
If your loan has an offset account, you can focus on building up your savings there. Any money in the account offsets your loan principal and means you pay less interest.
Your repayments won't change, but you'll repay the loan faster and ultimately save yourself interest.
Make extra repayments
Even if your home loan doesn't have an offset account, making extra repayments on the loan is another way to get ahead.
While this obviously costs you more, every extra repayment you make gets you out of debt faster and saves you interest in the long run.
If you can afford to do it, it's a smart option, especially when rates are so high.
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