No rate cut for Christmas, unless you’ve wrapped up a big deposit
09 Dec 2025
With no more RBA rate relief expected this year, or next, borrowers should use the time over summer to check whether they can capitalise on the equity in their property to secure a lower rate.
New research shows the majority (62%) of lenders reserve their lowest refinancing rates for owner-occupiers who own at least 30% of their property.
Out of the 10 lowest variable rates, nine require borrowers to own at least 30% and six require at least 40%.
The good news is many borrowers likely fall into this bucket.
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| Lowest variable rates for refinancers on Canstar | |||
|---|---|---|---|
| Provider | Equity required | Advertised rate | Comparison rate* |
| Geelong Bank | 20% | 4.99% | 5.02% |
| in1bank | 50% | 5.08% | 5.13% |
| Pacific Mortgage Group | 40% | 5.09% | 5.09% |
| Homestar Finance | 40% | 5.14% | 5.14% |
| People’s Choice | 30% | 5.14% | 5.15% |
| RACQ Bank | 40% | 5.14% | 5.15% |
| Heritage Bank | 30% | 5.14% | 5.16% |
| Mortgage House | 40% | 5.14% | 5.18% |
| Australian Mutual Bank | 40% | 5.14% | 5.21% |
| Freedom Lend | 30% | 5.14% | 5.54% |
Source: Canstar – 09/12/2025. Based on owner occupier variable loans on Canstar’s database excluding first home buyer loans, green loans and introductory rate loans. Lowest rates based on rate and then comparison rate. One product per provider.
Majority of borrowers likely to own more than half of their property
Equity is the proportion of the property a borrower owns at current prices, and for many, this has surged over the last few years, not just from payments they’ve made on their mortgage, but also as a result of soaring property prices.
It’s calculated by subtracting the current value of the property from the amount owing on the loan, then dividing it by the value of the property.
Looking at CBA’s full-year results, the average borrower owns more than 58% of their property at today’s values. Similarly, our 2025 Consumer Pulse Report found borrowers estimated their home equity at 65%.
Complacent borrowers likely to be sitting on a goldmine of equity but uncompetitive rates
Analysis of APRA data shows $621 billion worth of owner-occupier mortgages are more than three years old.
The owners of these loans are likely to be sitting on a decent amount of equity, but also paying an uncompetitive rate, unless they’ve been extremely successful at haggling with their bank over the years.
For example, the average owner-occupier who took out a $600,000 loan in April 2022, just before the rate hikes, who hasn’t renegotiated since, is likely to be on a rate of 5.96%. Yet our data shows there are 10 lenders offering variable rates of 5.14% or less.
If they refinanced their loan to one of the lowest rates of 5.14%, they could potentially save $8,154 in the next two years, even when switch costs are factored in.
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| Potential impact from refinancing a $600k loan | |||
|---|---|---|---|
| Variable rate today | Monthly repayments | Cost – next 2 years | |
| Complacent borrower | 5.96% | $3,575 | $66,720 |
| Refinance to a competitive rate | 5.14% | $3,293 | $58,566 |
| Difference | -0.82% | -$283 | -$8,154 |
Source: Canstar. Notes calculations are estimates based on an owner-occupier paying principal and interest with a $600k debt and 30 years remaining in April 2022. Assumes the person has not renegotiated their rate since. Costs include $1,150 in switch costs, but not ongoing fees. Assumes the borrower keeps the loan size and term the same when switching. Calculations assume variable rates change in line with CBA’s current cash rate forecast.
What’s a decent rate now?
Variable
- 5.51% is the average owner-occupier variable rate.
- 4.99% is the lowest variable rate.
- 43 lenders currently offer at least one variable rate under 5.25%.
Fixed
- 5.10% is the average new fixed rate for owner-occupiers (3 years or less).
- 4.64% is the lowest fixed rate, available on a 2-year term for first home buyers.
- 58 lenders offer at least one fixed rate under 5.25%.
- 72% of lenders’ lowest rate loans are fixed, not variable.
Canstar’s data insights director, Sally Tindall says, “Christmas might be around the corner, but there will be no further rate relief for borrowers unless they start shopping for their own present.”
“At this stage, not even the RBA knows with any great certainty whether its next move will be up or down.
“Borrowers with a mortgage should not plan for any further rate relief in 2026, and instead, start preparing for a potential hike, just in case one materialises later next year.
“The RBA is not going to spring a rate hike on borrowers without ample warning, however, if the central bank isn’t on track to get inflation back into the target band as forecast, then it could be forced to act.
“While we wait for the data to push the RBA one way or the other, there is one lever borrowers can pull right now – their own equity.
“If you’ve racked up 40 per cent equity or more, you’re suddenly a VIP, at least in the eyes of your bank. The good news is plenty of Australians fall into this camp.
“APRA data shows $621 billion worth of owner-occupier loans have been with the same lender for over three years. The owners of these mortgages are likely to have a decent amount of equity built up, not just from their repayments but also from rising property prices. The irony is, they’re also likely to be on an uncompetitive rate.
“Take 10 minutes in the lead up to Christmas to check your equity. Work out how much you still owe on your mortgage, minus this from a current estimate of how much your property is worth and there’s your equity.
“Right now, a competitive owner-occupier rate is under 5.25 per cent, while a highly competitive one is under 5.14 per cent. Anything above this should be a cue to shop around.
“Refinancing to a different lender might not be on the agenda for your summer holiday, but the short-term investment could end up paying for your entire summer holiday next year.”
* Note: A comparison rate is a rate that all lenders by law must display next to their advertised interest rates. It’s a rate that takes into account some of the fees and charges of a home loan to give you a more accurate representation of a loan’s interest rate once the costs are taken into account. The comparison rate for all home loans and loans secured against real property are based on secured credit of $150,000 and a term of 25 years. *This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
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