“Yes, especially for those on legacy rates. The gap between existing and new customer rates has widened across the three rate rises of 2026.”
The instinct to avoid refinancing when rates are rising is understandable — but it inverts the actual incentive. Rate rises create the conditions where lenders compete hardest for new business, and where existing customers who haven’t reviewed are most likely to be overpaying.
Why 2026 specifically creates opportunities
Three RBA rate rises have been passed on fully to variable borrowers. Banks have competed aggressively on new customer rates to maintain volumes. The gap between what new customers receive and what existing customers pay has widened — in some cases to 0.5–0.7%. That gap is the refinancing opportunity.
Who benefits most from refinancing in 2026
Borrowers who entered the market in 2019–2022 and haven’t reviewed their rate since. Borrowers rolling off fixed terms taken out at sub-2% rates in 2020–2021 — the revert rates are typically well above the competitive variable market. Borrowers with loan balances above $400,000 where the rate saving in dollar terms justifies switching costs within a reasonable break-even period.
Who should be cautious
Borrowers with LVRs above 80% — particularly in Melbourne where prices have been softer — may find their refinance options limited by equity. Borrowers with unstable employment history in 2025–26 may face tighter serviceability assessments. Borrowers within 2–3 years of loan discharge may find break-even periods on switching costs extend beyond their remaining term.
The rate cycle context
CBA economists are forecasting the RBA to hold from June onwards. If that forecast proves correct, the variable rate environment stabilises. Refinancing into a competitive variable rate in a stable rate environment — rather than a continuing rise environment — carries lower risk of the rate gap narrowing before break-even.
→ You may wish to speak with a licensed mortgage broker to assess your personal circumstances. This is general information only. Individual circumstances vary and scheme details change regularly. Verify current eligibility, caps, and terms with official sources before making decisions. Speak with a licensed mortgage broker for advice tailored to your situation. All loans are subject to lender approval.
Sources: CBA, RBA May 2026 Rate Analysis (commbank.com.au); ASIC MoneySmart, Refinancing Your Home Loan 2025; MFAA Industry Intelligence Service Report 2025.
