It is a strange moment to be watching the mortgage market. On one hand, lenders are cutting rates and chasing new customers harder than they have in years. On the other, three of the big four banks have just told their own customers to brace for a rate rise. Both things are true at once, and if that feels contradictory, you are not imagining it. At PierPoint Lending, we think it is worth unpacking what is actually going on, because it changes the calculation for anyone weighing up a new loan, a refinance, or whether to lock in a fixed rate.

As of late August 2026, the lending market is being pulled in two directions. Competition for new customers has intensified, with 35 lenders cutting variable rates since 1 June and 52 lenders now offering at least one variable rate below 6 per cent. At the same time, sticky inflation has pushed three of the big four banks (NAB, CBA and ANZ) to abandon earlier forecasts of a rate cut and instead predict the Reserve Bank will lift the cash rate before the end of the year, with NAB flagging a possible second hike that would take the cash rate to 4.85 per cent. Only Westpac still expects the RBA to hold. For borrowers, the practical takeaway is this: existing customers on older rates are at growing risk of paying what is sometimes called a loyalty tax, while the market for new customers remains sharply competitive. Reviewing your rate now, rather than waiting for the RBA’s next decision, is the sensible move either way.

Why Lenders Are Still Discounting

Despite the shift in rate expectations, lenders have not pulled back on chasing new business. Canstar’s tracking shows 35 lenders have cut variable rates for new customers since the start of June, and 52 lenders now have at least one variable offer under 6 per cent. This kind of front-book discounting, where the sharpest rates go to new customers rather than existing ones, tends to run on its own momentum, driven by lenders competing for market share and broker-written volume rather than moving in lockstep with where the cash rate is heading next.

Why the Rate Outlook Just Changed

The shift in tone from the banks followed the release of July’s inflation figures. Trimmed mean inflation, the measure the RBA watches most closely, held at 3.6 per cent annually, unchanged since late 2025, while household spending rose 7 per cent year-on-year, the fastest pace since mid-2023. ANZ was the first of the majors to move, forecasting a hike in November. NAB followed within a day, tipping a possible move as early as the RBA’s 28 to 29 September meeting, with a second increase in November not ruled out. CBA also expects a hike, most likely in November, while Westpac remains the outlier, still expecting the RBA to hold through the rest of the year.

What a Hike Could Cost You

Canstar has modelled what back-to-back rate rises in September and November would mean in dollar terms. A borrower with a $600,000 mortgage and 25 years remaining could see minimum repayments rise by around $183 a month from those two moves alone, taking the cumulative increase across the RBA’s five hikes so far this year to roughly $456 a month. On a $1 million loan, the cumulative increase could reach around $759 a month. These are modelled figures rather than a certainty, since the RBA’s decision is not locked in, but they give a useful sense of scale for anyone budgeting ahead.

The Loyalty Tax Is Getting More Expensive

The gap between what new customers are offered and what existing borrowers are quietly left paying has become more pronounced as competition heats up. If your variable rate currently starts with a 6 or a 7 as an owner-occupier, you are likely sitting above what is now available in the market, and that gap is only likely to widen if lenders keep discounting for new business while existing rates drift upward with the cash rate. The fix is usually straightforward: either negotiate directly with your current lender or refinance to a more competitive deal, and there is real value in doing this before rather than after the RBA’s September meeting.

Should You Fix, or Stay Variable?

With three of the four majors now pointing towards higher rates and one holding firm, there is no single right answer here, but the uncertainty itself is useful information. If you value certainty over the next year or two and are uncomfortable with the prospect of further increases, locking in a portion of your loan at a competitive fixed rate is worth comparing. If you expect to sell, refinance again, or make extra repayments in the near term, the flexibility of a variable loan, especially one of the sharper sub-6 per cent offers now available, may suit you better. A split loan, part fixed and part variable, is also worth considering if you want a foot in both camps.

The mortgage market rarely moves in one direction at a time, and right now is a good example of that. Whether you are weighing up a new loan, wondering if your current rate is still competitive, or trying to decide between fixed and variable, it helps to have someone across both sides of the picture. Get in touch with PierPoint Lending and we will talk through what these shifts mean for your specific situation.

Frequently Asked Questions

Why are banks cutting rates for new customers if they expect the RBA to hike?

These are two separate dynamics. Lender discounting is largely driven by competition for new customer volume and broker-written business, while the RBA’s cash rate decision is driven by inflation data. Lenders can keep competing hard for new business even while flagging that the cash rate itself may rise, and the size of any future discount will still be set against a higher base rate if the RBA does move.

Which banks now expect an interest rate hike, and when?

As at late August 2026, ANZ expects a hike in November, NAB expects a possible move as early as September with a second increase in November not ruled out, and CBA also expects an increase, most likely in November. Westpac is the outlier and still expects the RBA to hold through the rest of the year.

How much extra could I pay if the RBA hikes twice more this year?

Based on Canstar’s modelling, a borrower with a $600,000 mortgage and 25 years remaining could see minimum repayments rise by around $183 a month from two further hikes, taking the total increase across this year’s five rises to roughly $456 a month. Borrowers with a $1 million loan could see a cumulative increase closer to $759 a month. These are estimates based on current forecasts, not a guaranteed outcome.

Should I refinance now or wait to see what the RBA decides?

There is a reasonable case for acting sooner rather than later. If your current rate starts with a 6 or a 7 as an owner-occupier, you are likely already paying more than necessary, and that gap tends to widen rather than close if the cash rate rises further. Reviewing your options now means you are negotiating from a position of choice rather than reacting after the fact.

Enquire Now

Complete the enquiry below and a member of the PierPoint Lending team will contact you to schedule a complimentary home loan review.