The RBA doesn't set your rate. Your rate is built — layer by layer.
The cash rate is only the foundation. On top of it sit the lender's funding costs, their margin, and a layer priced to you — your deposit, your loan purpose, your credit file. That's why two neighbours with the same bank can pay different rates, and why the advertised number is rarely the number you get. Here's where rates actually sit right now, and how the one with your name on it gets made.
Where rates sit right now.
Official figures from the Reserve Bank — not advertised specials. These are averages across the market; they move with the cash rate, and your own rate will differ.
All figures are indicative market averages as at the dates shown — they move with the cash rate and are not an offer, quote or the rate you would receive. WARNING: any comparison rate is true only for the example on which it is based (typically a secured loan of $150,000 over 25 years) and may not include all fees and charges. Different terms, fees or loan amounts might result in a different comparison rate. Sources: RBA cash rate target; RBA Lenders' Interest Rates (F-series); ABS Consumer Price Index. Verified 15 July 2026.
How your rate is built — from the cash rate up.
The average new owner-occupier loan was written at 6.22% in May 2026, against a 4.35% cash rate. The gap — roughly 1.9 percentage points on average — is where lenders compete, and where a broker goes to work.
One home loan rate, deconstructed · base layer = actual RBA cash rate · upper layers illustrative, not a rate quote
Your risk pricing
LVR, loan purpose, credit history, documentation. The layer you can actually influence — and the layer a broker shops across lenders.
Illustrative · varies per borrower · not a rate quoteFunding costs + lender margin
What it costs the lender to raise the money, plus operating costs and profit. Together with risk pricing, this gap averaged ~1.9 percentage points on new owner-occupier loans in May 2026.
Illustrative split · varies per lender · not a rate quoteRBA cash rate — 4.35%
The floor under every lender's funding. Set by the Reserve Bank board; nobody negotiates it. When it moves, variable rates typically follow — in both directions.
Actual · RBA · effective 17 Jun 2026The stack totals the RBA-reported market average of 6.22% for new owner-occupier housing loans (May 2026); the split between funding/margin and risk pricing is illustrative only — lenders don't publish it, and it differs by lender and borrower. The ~1.9 point gap is derived from the two RBA figures shown. This diagram is an explainer, not a quote, offer or indication of any rate available to you.
The cash rate cuts both ways — and it has, twice, in two years.
Rates were cut through 2025, then lifted again through early 2026 as inflation picked back up. Anyone pricing a loan on the assumption rates only move one way is guessing.
RBA cash rate target (% p.a.) at each change point over the last ~24 months; held at 4.35% at the 16 June 2026 meeting. Source: RBA cash rate decisions, verified 15 July 2026. Past movements are no indication of future decisions.
Four things lenders price you on.
The cash rate and the lender's funding costs are out of your hands. This layer isn't — and it's where preparation (and lender choice) changes the number.
LVR — your deposit
The share of the property you're borrowing. Lower LVR means lower risk to the lender, and the sharpest pricing tiers generally sit at lower LVRs — while high-LVR loans usually price higher and add lenders' mortgage insurance.
Loan purpose & repayment type
Owner-occupied, principal-and-interest loans generally get the sharpest pricing. Investment lending and interest-only repayments typically price higher, because regulators require lenders to hold more against them.
Credit history
A clean file opens every lender's best tiers. Missed payments or defaults narrow the field towards specialist lenders, who price for the extra risk. Timing an application right can be worth more than shopping the rate.
Income documentation
Full-doc PAYG income is the easiest to verify, so it prices best. Self-employed and low-doc applications typically carry a premium — though the right lender for your income type can shrink it substantially.
The advertised rate is a shopfront. Your rate is negotiated behind it.
Advertised rates are best-case numbers, usually assuming a low LVR, owner-occupied purpose and clean full-doc income. Your actual rate is set when a lender prices your specific file — and for existing customers, banks quietly rely on you never asking again. The gap between what new customers are offered and what loyal customers keep paying is real enough that brokers run a standing process against it.
It's called a pricing request: the broker puts your loan to your lender (or a competitor) and asks them to sharpen the rate for your risk profile. No refinance, no new application — often just a discount to keep or win your business. It's the cheapest phone call in finance, and most borrowers never make it.
Outcomes of pricing requests depend on the lender, your loan and current competition — a discount is never assured. Not an offer of credit.
Comparison rates — the number that keeps headline rates honest.
A headline rate can hide fees. The comparison rate, which Australian lenders must publish alongside any advertised rate, folds the interest rate and most upfront and ongoing fees into a single figure — so a "low" rate with heavy fees shows its true colours. When two loans are close on headline rate, the comparison rate is usually the better guide to total cost.
It has limits: it won't capture government charges, break costs or optional-feature fees (like some offset accounts), and it says nothing about flexibility.
WARNING: comparison rates are calculated on a standard example — typically a secured loan of $150,000 over 25 years — and are true only for that example. They may not include all fees and charges, and different terms, fees or loan amounts might result in a different comparison rate.
Fixed, variable, or a bit of both.
With the cash rate having been cut and then raised inside two years, the fixed-vs-variable call is really a question about certainty — how much you want, and what you'll trade for it.
Fixed rate
Your rate and repayments are locked for the fixed term — protected if rates rise, left behind if they fall, and usually with capped extra repayments and break costs if you exit early.
How fixed rates work →Variable rate
Moves with the market in both directions. Typically brings the full feature set — offset, redraw, unlimited extra repayments — and no break costs if you refinance or reprice.
How variable rates work →Split loan
Fix part, keep part variable. Partial protection from rises, partial benefit from cuts, and features preserved on the variable side — at the cost of managing two portions.
How split loans work →What a broker actually does about your rate.
We compare your scenario across our panel of 50 lenders, run pricing requests instead of taking advertised rates at face value, and re-check your loan against the market as conditions change — a reprice review, so the rate you signed at doesn't quietly become the rate you're stuck with.
And unlike a bank, a mortgage broker is bound by the Best Interests Duty — a legal obligation under the credit legislation to act in your best interests when recommending a loan, and to prioritise your interests over ours (including over any commission). A bank branch owes you no such duty; it sells you that bank's products.
Our service is generally at no cost to you — lenders pay commission on settlement; any fee we ever charge is disclosed in writing before you commit. We compare our 50-lender panel, not every product in the market.
Interest rates, answered straight.
What is the RBA cash rate right now?
The RBA cash rate target is 4.35% p.a., held at the Reserve Bank's 16 June 2026 meeting (effective 17 June 2026). It reached that level via three 0.25% increases in February, March and May 2026, after a series of cuts through 2025. The board reviews it at each scheduled meeting, so always check the date on any figure you read.
What is the average home loan interest rate in Australia?
RBA Lenders' Interest Rates data for May 2026 puts the average rate on new owner-occupier housing loans at 6.22% p.a., and the average across outstanding owner-occupier loans at 6.20% p.a. These are market-wide averages, not offers — they move with the cash rate, and individual rates vary with LVR, loan purpose, credit history and lender.
Why is my rate higher than the rates lenders advertise?
Advertised rates are best-case numbers that usually assume a low LVR, owner-occupied purpose, principal-and-interest repayments and clean full-doc income. If your loan differs on any of those — or was written a while ago and never repriced — you'll likely be paying more. A pricing request through a broker asks the lender to re-sharpen the rate for your actual file, without refinancing.
What is a comparison rate?
A comparison rate combines a loan's interest rate with most upfront and ongoing fees into a single percentage, so loans can be compared on something closer to true cost. Lenders must publish it alongside any advertised rate. Note the warning that always accompanies it: it's calculated on a standard example (typically $150,000 over 25 years) and is only true for that example — different amounts, terms or fees produce a different comparison rate.
Should I fix my rate now?
There's no universal answer — the cash rate was cut through 2025 and then raised again through early 2026, which is exactly why the decision is about your need for certainty rather than predicting the RBA. Fixing buys repayment certainty at the cost of flexibility and break costs; variable keeps features and follows the market both ways; a split does some of each. We'll model the options against your situation rather than guess the cycle.
Can I get a lower rate without refinancing?
Often, yes. A pricing request — where your broker asks your current lender to reprice your loan against what competitors would offer for your profile — needs no new application and no refinance. Lenders frequently sharpen rates to retain customers, though a discount is never assured. If they won't move, that's when comparing the wider panel makes sense.
Find out what lenders would price you at.
Averages are context. Your rate depends on your deposit, your income and your file — tell us your scenario and we'll compare it across 50 lenders, with a pricing request where it counts. No credit check to start.
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