Rate Cuts Are Still Coming, Just Not When You Think

“So when are rates actually coming down again?”

YBR brokers have been getting this question almost daily since one of the big four quietly walked back its forecast for a 2027 rate cut. If you’ve been holding your breath waiting for the next round of cuts to make your mortgage feel manageable again, that revision probably landed with a thud. It certainly did for a lot of the borrowers we’ve been speaking to this week.

Here’s the thing though. The headline was about a cut being removed from a forecast. The story underneath is more interesting, and honestly, more useful to you as a borrower trying to plan the next couple of years.

What actually changed, and what didn’t

The RBA held the cash rate at 3.60% at its final meeting of 2025. That much is settled. What shifted was one major bank’s economics team revising their forward view, taking out a cut they had previously pencilled in for 2027 and reshaping the expected path from here. Other bank economists have their own views, and Canstar’s tracking of the major bank forecasts shows there’s still real disagreement about how many cuts we get from here and when they land.

That disagreement matters. Because when borrowers hear “a cut has been removed”, they often read it as “rates are staying high forever”. That’s not what’s being said. What’s being said is that the timing of the next moves is less certain than the market thought a few months ago, and the pace of relief may be slower than the optimistic forecasts had you believing back in mid-2025.

We’re seeing a lot of people freeze up when the forecast changes. They stop looking at their loan. They stop comparing. They wait for a signal that keeps moving. And in the meantime, they’re often sitting on a rate that a broker could have improved months ago, regardless of what the RBA does next.

The conversation we keep having

A borrower rang one of our brokers last week. Fixed rate rolling off in February, currently paying well above what’s available in the market today, and they’d decided to “wait and see what happens with rates” before doing anything. That instinct is completely understandable. It’s also potentially expensive.

Here’s what gets missed in the wait-and-see approach. The gap between what you’re paying now and what’s available to you today is a real, measurable number. The gap between what you might be paying in twelve months if two more cuts land is a guess, built on forecasts that (as this week has reminded everyone) get revised. Acting on the known number is almost always the stronger play. If cuts come, you benefit from them on your new, lower rate too. You don’t lose the cuts by refinancing; you just start from a better base.

The other misconception worth naming. A lot of borrowers assume their current lender will pass on any RBA cut in full and quickly. History says that’s not always how it plays out. Lenders make their own pricing decisions, and the pass-through varies. Your broker watching the market on your behalf will often spot movement well before your own bank tells you about it.

What this means for your next twelve months

If you’re on a variable rate right now, the question isn’t really “when will the RBA cut”. The question is “am I on a competitive rate for my situation today, and if not, what would it take to fix that”. Those are two different conversations, and only one of them requires a crystal ball.

If you’re rolling off a fixed rate in the next six months, this is the moment to start the conversation, not the moment to wait. Serviceability assessments, valuations, comparing lenders across our panel, these things take time to do properly. Leaving it until the week your fixed rate expires means you get whatever your current lender offers you on their retention desk, which is rarely their sharpest number.

If you’re a first home buyer who’s been sitting on the sidelines waiting for rates to fall further before jumping in, the revised forecasts are worth thinking about honestly. Waiting for cheaper borrowing costs while property prices continue to move in most capital cities can leave you further from the goal, not closer. That’s not a reason to rush. It’s a reason to actually run the numbers on where you stand today, so the decision is based on your situation rather than a forecast someone else can revise.

Investors are asking us a slightly different question. With the yield curve doing what it’s doing and forecasts shifting, is it a fix, split, or stay variable moment? There’s no universal answer. It depends on your cashflow tolerance, your other holdings, and how much certainty you personally need over the next two to three years. Some lenders on our panel are currently offering competitive fixed rates for two and three year terms; others are sharper on variable. That’s exactly the kind of comparison a broker should be doing for you, not something you should have to work out alone.

The point that keeps getting lost

Rate cuts are still coming. Most bank economists, even after this week’s revision, still expect the cash rate to be lower in twelve to eighteen months than it is today. What’s changed is the confidence around exactly when, and how many. That’s a very different story from “no relief in sight”, which is how a lot of borrowers are reading it.

The borrowers who tend to come through these cycles in the strongest position aren’t the ones who timed the RBA perfectly. Nobody does that. They’re the ones who kept their loan under review, moved when a better option was actually on the table, and didn’t let forecast noise stop them from making decisions about the loan they have right now.

If you haven’t had your loan properly reviewed in the last twelve months, or if you’ve got a fixed rate rolling off in the first half of next year, this is usually the point where a quick conversation can stop a small decision becoming an expensive one. Our brokers can pull your current rate against what’s available across our lender panel and tell you, in plain numbers, whether there’s a case to move or a case to sit tight.

You can find your local YBR broker at ybr.com.au, or run a quick check yourself using the calculators at ybr.com.au/calculators/ to see what different rate scenarios would look like on your loan.

*The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Please consider whether it is appropriate for your circumstances before acting on it, and seek advice from a qualified professional where necessary.*