Major banks reveal shock new timeline for mortgage relief

Australian homeowners hoping for a break in mortgage repayments this year may be in for disappointment.

ANZ has become the latest major bank to push back its forecast for the next cash rate cut, now predicting it will occur in February 2026.

This follows similar revisions from the Commonwealth Bank and National Australia Bank, both of which also expect a single cut early next year.

The Reserve Bank of Australia appears set to hold the cash rate steady for the remainder of 2025, leaving borrowers with little choice but to take control of their financial situation.

For homeowners, this means shopping around for competitive mortgage rates and exploring refinancing options could be the key to staying ahead.

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Banks revise forecasts: What changed?

In just over a week, three of the big four banks have updated their cash rate predictions.

ANZ and CBA now expect a single rate cut in February 2026, while NAB forecasts the same in May.

Westpac remains the outlier, predicting three cuts – one in November 2025, another in February 2026, and a third in May 2026.

However, even Westpac’s economists admit a November cut is “far from assured.”

The shift in forecasts comes as inflation data continues to challenge expectations.

Source: Canstar.com.au

Canstar.com.au data insights director, Sally Tindall said while forecasts can be wrong, the latest two rounds of monthly inflation data had cast a long shadow over the chance of a rate cut this year.

“ANZ is the third major bank to slam the door shut on expectations of a 2025 rate cut,” she said.

“Households waiting for the RBA to swoop in with a cut could be waiting a while. If you want to get ahead on your mortgage, take matters into your own hands by shopping around for a sharper rate.”

What does this mean for homeowners?

For the foreseeable future, borrowers will need to manage their mortgage repayments without the prospect of immediate rate relief.

With the cash rate likely to remain on hold, homeowners should focus on securing the best possible deal on their home loans.

According to Canstar.com.au, the lowest variable rate for owner-occupiers is currently 4.99 per cent, though this is typically reserved for first-home buyers.

Refinancers may find rates starting at 5.08 per cent.

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Source: Canstar.com.au

For investors, variable rates begin at 5.24 per cent for principal and interest repayments or 5.39 per cent for interest-only loans.

“Owner-occupiers paying down their debt might be able to pick up a deal under 5.25 per cent, while investors can aim for under 5.5 per cent, particularly if they’re willing to pay both principal and interest,” Ms Tindall said,

“If you’re paying significantly more, it’s time to take action.”

Refinancing and sweeteners: Are they worth it?

While cashback deals are no longer as widespread as they were during the refinancing boom of 2023, some lenders are still offering incentives to attract borrowers.

Canstar.com.au’s analysis shows that 10 lenders currently provide cashback offers, with some offering up to $4000.

These deals can help cover refinancing costs and provide a financial buffer for households.

Frequent flyer points are another option for borrowers looking to switch.

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Four lenders, including CBA, now offer Qantas Points as part of their home loan packages. CBA’s recent entry into this space includes up to 300,000 Qantas Points for borrowers who apply online.

However, Tindall warned homeowners to focus on the bigger picture.

“With any upfront sweetener, borrowers should remember, free flights and cold hard cash might sound appealing, but the real savings typically come from securing a low interest rate, particularly on larger loans and especially if you’re unlikely to refinance regularly.”

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