How Does a Mortgage Broker Work? A Step-by-Step Explanation

This article first appeared on awesomelendingsolutions.com.au.

If you've never used a mortgage broker before, you might wonder what they actually do. In simple terms, a broker is your guide and helper through the home loan process. Here's how it works, step by step.

Step 1: Getting to know you

Your first conversation is about understanding you. A broker will ask about:

• Your goals (buying, refinancing, investing)
• Your income and job
• Your expenses and debts
• Your savings or equity
• Your timeframe
• What's important to you in a loan

This usually takes 30 to 60 minutes and can be in person, by phone or by video.

Step 2: Working out your options

The broker then works out:

• How much you can borrow
• Which lenders are likely to approve you
• Which government schemes you may qualify for
• What loan features would suit you

Lenders each have their own policies and calculators. A good broker knows these differences well.

Step 3: Comparing loans

The broker compares loans from their lender panel. They look at:

• Interest rates and comparison rates
• Fees
• Features like offset accounts and redraw
• Lender policies that suit your situation

Step 4: Making a recommendation

Your broker explains which loan they recommend and why. Under the Best Interests Duty, they must act in your best interests. They'll usually show you other options too, and give you a document called a credit proposal or preliminary assessment, which explains the recommendation.

You make the final decision.

Step 5: Collecting documents

You'll provide documents such as:

• Photo ID
• Payslips or tax returns
• Bank statements
• Statements for existing debts

The broker checks everything before it goes to the lender, which reduces delays.

Step 6: Lodging the application

The broker submits your application and supporting documents to the lender. They then follow up with the lender and answer any questions on your behalf.

Step 7: Approval

You might first receive pre-approval (if you're still looking) or go straight to formal approval (once you have a property or are refinancing). The lender orders a valuation of the property.

Step 8: Loan documents and settlement

When your loan is approved, the lender issues loan documents. Your broker can help explain them. The broker then works with your conveyancer and the lender to make sure settlement happens on time.

Step 9: After settlement

A good broker doesn't disappear. They'll check in to:

• Make sure your loan is set up correctly
• Review your rate regularly
• Help when your fixed rate ends
• Help with future goals like renovating or investing

How brokers are paid

Most brokers are paid by lenders through:

• Upfront commission – a percentage of the loan amount, paid after settlement
• Trail commission – a small ongoing percentage while the loan is active

These are disclosed to you in writing. For most standard loans, you don't pay the broker directly.

What brokers don't do

Brokers aren't usually tax agents, financial planners or lawyers. A good broker will tell you when you need advice from one of these professionals.

Why it matters in 2026

With rates rising four times in 2026, the new APRA debt-to-income limit, an expanded 5% Deposit Scheme and new tax rules for investors, there are more moving parts than ever. A broker keeps track of these so you don't have to.

An example

Sarah and Ben want to buy their first home in Sydney. Their broker:

1. Works out they can borrow $720,000
2. Confirms they qualify for the 5% Deposit Scheme and NSW stamp duty exemption
3. Compares participating lenders and recommends one with a full offset account
4. Gets them pre-approved within a week
5. Manages the process through to settlement after they buy a $760,000 unit

How long does the whole process take?

From your first chat to settlement, it's often six to twelve weeks when buying. That includes finding a property. Refinances are usually faster, often two to six weeks. The more organised your documents are, the quicker things move.

Frequently asked questions

Do I have to pay a broker?

Usually not for standard home loans. Brokers must tell you about any fees upfront.

Can I talk to a broker before I'm ready to buy?

Yes. Many people talk to a broker months before they buy, to plan their savings and budget.

What if the broker's recommendation doesn't suit me?

You don't have to accept it. A good broker will explain alternatives and adjust to your needs.

Will a broker check my credit?

Only with your permission, and usually only when you're ready to apply.

Talk to Awesome Lending Solutions

Every situation is different, and the right loan depends on your goals, income and timing. At Awesome Lending Solutions, we compare a wide panel of lenders and explain your options in plain English, with no pressure. Call us on 02 7904 9560 or visit awesomelendingsolutions.com.au to book a chat.

This article is general information only. It does not consider your objectives, financial situation or needs, and it is not financial, tax or legal advice. Scheme rules, interest rates and laws were current as at October 2026 and can change. Speak with a licensed professional before making any decision. Albert Waldron is a Credit Representative (CR 407514) of AFG's Australian Credit Licence 389087.

Mortgage Broker vs Bank: Which Is Better for Your Home Loan?

This article first appeared on awesomelendingsolutions.com.au.

When you need a home loan, you have two main choices: go directly to a bank, or use a mortgage broker. Both can work. The right choice depends on your situation and what you value. Here's a fair comparison.

The key difference

• A bank can only offer its own home loans.
• A broker can compare loans from a panel of lenders, which often includes major banks, smaller banks, credit unions and non-bank lenders.

Comparing the two

Choice

Bank: one lender's products.

Broker: many lenders' products, often dozens.

Advice and legal duty

Bank: must follow responsible lending rules.

Broker: must follow responsible lending rules and the Best Interests Duty, which requires brokers to act in your best interests and put your interests first if there's a conflict.

Cost

Bank: no broker fee.

Broker: usually no direct cost for standard home loans, as the lender pays the broker. Some brokers charge fees for complex deals and must tell you upfront.

Rates

Banks sometimes offer the same rates through brokers as directly. Brokers may also access rates or lenders you wouldn't easily find yourself. Neither option guarantees the lowest rate.

Service

Bank: you deal with the bank's staff, who may change over time.

Broker: you usually have one point of contact who manages the whole process and often stays with you after settlement.

Complex situations

Brokers often shine when your situation doesn't fit neatly into one bank's rules, such as:

• Self-employed income
• Casual or contract work
• Past credit issues
• Investors with several properties
• Using government schemes
• Unusual properties

When going direct to a bank might make sense

• You have a simple situation and a strong relationship with your bank
• Your bank offers a great deal for existing customers
• You're comfortable comparing the market yourself

Even then, it can be worth asking a broker to check whether your bank's offer is competitive.

When a broker might be better

• You want to compare many lenders without lots of credit enquiries
• You're a first home buyer and want help with schemes
• You have complex income or credit history
• You're an investor and need help with structure
• You're short on time

Does using a broker cost more?

For standard home loans, brokers are paid a commission by the lender. This doesn't increase your interest rate. In Australia, lenders generally pay similar commissions across loans, and the Best Interests Duty requires brokers to recommend the loan that suits you.

A real-world example

Hannah is self-employed and has been in business for 18 months. Her bank says it needs two full years of tax returns. A broker finds a lender that accepts one year of tax returns plus business statements, and she's approved for a competitive loan.

The 2026 picture

In 2026, the lending landscape is changing fast:

• Four rate rises have pushed the cash rate to 4.60%
• APRA's debt-to-income limit affects how many high-DTI loans each bank can write
• Each lender's appetite changes from month to month

A broker who sees many lenders' policies every day can often spot which lenders are best placed for your situation right now.

How to make the most of either option

Whichever path you choose:

• Gather your documents early
• Be honest about your income, expenses and debts
• Ask about fees and features, not just the rate
• Get everything in writing
• Review your loan every year

Questions to ask either one

Whether you speak to a bank or a broker, ask:

• What's the comparison rate, not just the advertised rate?
• What fees will I pay upfront and each year?
• Does this loan have an offset account?
• What happens when any discount or fixed period ends?
• How will you help me after settlement?

The answers will tell you a lot about whether the loan, and the service, will suit you over the long term.

Frequently asked questions

Do banks pay brokers?

Yes. Lenders pay brokers an upfront and ongoing commission. This is disclosed to you.

Can a broker get a better deal than my bank?

Sometimes. A broker can compare your bank's offer with many others, so you can see where it stands.

Will a broker include my bank in the comparison?

Usually, if your bank is on their panel. Ask.

Is my information safe with a broker?

Brokers must follow privacy laws and only share your information with lenders and others needed to process your loan. You can ask your broker to explain how your information is stored and used.

Talk to Awesome Lending Solutions

Every situation is different, and the right loan depends on your goals, income and timing. At Awesome Lending Solutions, we compare a wide panel of lenders and explain your options in plain English, with no pressure. Call us on 02 7904 9560 or visit awesomelendingsolutions.com.au to book a chat.

This article is general information only. It does not consider your objectives, financial situation or needs, and it is not financial, tax or legal advice. Scheme rules, interest rates and laws were current as at October 2026 and can change. Speak with a licensed professional before making any decision. Albert Waldron is a Credit Representative (CR 407514) of AFG's Australian Credit Licence 389087.

Mortgage Broker in Sydney: Local Home Loan Help From North Strathfield

This article first appeared on awesomelendingsolutions.com.au.

When you search for a "mortgage broker near me" in Sydney, you'll find hundreds of options. Choosing a local broker you can trust makes a big difference. A broker who knows Sydney understands the suburbs, the price caps, the lenders' local policies and the challenges buyers face here.

Awesome Lending Solutions is a Sydney mortgage broking business based in North Strathfield in Sydney's Inner West. We help people across Sydney and NSW buy homes, refinance and invest.

Why choose a local Sydney broker?

Local market knowledge

Sydney is a big and diverse market. Prices, property types and lender attitudes vary from suburb to suburb. A local broker understands:

• Scheme price caps by postcode
• Lender policies on unit sizes, high-density buildings and certain postcodes
• Flood zones and other issues that can affect valuations
• How NSW stamp duty and grants work

Face-to-face meetings

Many clients like to sit down in person, especially for big decisions. We also meet by phone and video for busy families and clients across NSW.

Relationships with local professionals

A local broker often works alongside conveyancers, accountants, buyer's agents and real estate agents in the area, which can make the process smoother.

About Awesome Lending Solutions

Our director and finance strategist, Albert Waldron, has been a mortgage broker since 2002 and started Awesome Lending Solutions in its current form in 2014. Over that time, the business has:

• Settled more than 1,000 loans
• Worked with a panel of over 60 lenders
• Helped clients in every state and territory except the Northern Territory

Albert is a member of the FBAA and a Credit Representative (CR 407514) of AFG's Australian Credit Licence 389087.

Our office is at Level 1, 5 George Street, North Strathfield NSW 2137, close to Strathfield, Concord, Homebush, Burwood and Rhodes.

Who we help

• First home buyers – including the 5% Deposit Scheme, Help to Buy and NSW stamp duty exemptions
• Single parents – including the Family Home Guarantee with a 2% deposit
• Refinancers – to lower rates, consolidate debts or access equity
• Property investors – including structure, portfolio planning and the 2026 tax changes
• Self-employed borrowers – including low doc options
• SMSF borrowers – for commercial property, now that residential SMSF borrowing is banned

How the process works

1. Free first chat – we learn about your goals and situation.
2. Assessment – we work out your borrowing power and scheme eligibility.
3. Comparison – we compare suitable loans across our lender panel.
4. Recommendation – we explain our recommendation and the alternatives.
5. Application – we prepare and lodge the paperwork.
6. Approval and settlement – we manage the process and keep you updated.
7. Ongoing reviews – we check in to make sure your loan stays competitive.

The Sydney market in 2026

Sydney has seen a lot of change this year:

• The cash rate rose to 4.60% at the end of September, its fourth rise in 2026.
• Sydney home values were about 8.6% below their February peak by the end of September.
• The 5% Deposit Scheme now allows purchases up to $1.5 million in Sydney with no income cap.
• NSW first home buyers pay no stamp duty on homes up to $800,000.

These changes create both challenges and opportunities. Local advice can help you make sense of them.

What our clients value

Clients often tell us they value plain-English explanations, quick responses and the feeling that someone is on their side. Buying a home is stressful. Our job is to make the finance part as clear and calm as possible.

How brokers are paid

For most home loans, we are paid by the lender. This doesn't add to your loan costs, and we disclose all payments to you in writing. Under the law, we must act in your best interests.

Suburbs we often help with

We regularly help buyers and home owners in North Strathfield, Strathfield, Concord, Homebush, Burwood, Rhodes, Five Dock, Parramatta and across the Inner West and Western Sydney. We also help clients in regional NSW and interstate, so wherever you're buying, we can help you understand your options.

What to bring to your first chat

• Recent payslips or tax returns
• Recent bank statements
• Details of any debts
• Your goals and rough timeframe

Frequently asked questions

Do I need to live near North Strathfield to use you?

No. We help clients across Sydney and NSW, and in most other states, by phone and video.

Is the first meeting free?

Yes. There's no cost or obligation for an initial chat.

How quickly can I get pre-approval?

It depends on the lender and your documents, but many pre-approvals are completed within a few days to two weeks.

Talk to Awesome Lending Solutions

Every situation is different, and the right loan depends on your goals, income and timing. At Awesome Lending Solutions, we compare a wide panel of lenders and explain your options in plain English, with no pressure. Call us on 02 7904 9560 or visit awesomelendingsolutions.com.au to book a chat.

This article is general information only. It does not consider your objectives, financial situation or needs, and it is not financial, tax or legal advice. Scheme rules, interest rates and laws were current as at October 2026 and can change. Speak with a licensed professional before making any decision. Albert Waldron is a Credit Representative (CR 407514) of AFG's Australian Credit Licence 389087.

How to Choose the Best Mortgage Broker in Australia

This article first appeared on awesomelendingsolutions.com.au.

Around three in four new home loans in Australia are now arranged through mortgage brokers. But not all brokers are the same. The right broker can save you money, time and stress. The wrong one can leave you with a loan that doesn't suit you. Here's how to choose a good mortgage broker.

What does a mortgage broker do?

A mortgage broker helps you find, compare and apply for a home loan. They:

• Work out how much you can borrow
• Compare loans from a panel of lenders
• Explain options in plain English
• Check eligibility for government schemes
• Prepare and lodge your application
• Manage the process through to settlement
• Review your loan over time

How are brokers regulated?

Mortgage brokers must hold an Australian Credit Licence or be authorised as a credit representative under a licence. They must:

• Follow responsible lending rules
• Act in your best interests under the Best Interests Duty
• Disclose how they are paid
• Belong to the Australian Financial Complaints Authority (AFCA)

Many brokers are also members of industry bodies such as the FBAA or MFAA, which have their own standards and training requirements.

What makes a great broker?

1. A wide lender panel

The more lenders a broker can access, the more choice you have. Ask how many lenders they work with, and whether that includes major banks, smaller banks and non-bank lenders.

2. Experience with people like you

First home buyers, investors, self-employed borrowers and single parents all have different needs. Look for a broker with experience in your situation.

3. Clear communication

A good broker explains things simply, answers your questions and keeps you updated. You should never feel rushed or confused.

4. Transparency

A good broker tells you how they're paid, explains why they recommend a loan, and shows you the alternatives.

5. Ongoing support

The best brokers don't disappear after settlement. They review your loan regularly and help you as your life changes.

6. Strong reviews

Check Google reviews and ask friends and family for recommendations.

Questions to ask a broker

1. Are you licensed, or a credit representative? What is your licence number?
2. How many lenders do you work with?
3. How are you paid?
4. Have you helped people in my situation?
5. Do you work with lenders that offer the 5% Deposit Scheme and Help to Buy?
6. Will you review my loan after settlement?
7. What happens if I'm not happy?

Red flags to watch for

• Pressure to sign quickly
• Pushing one lender without showing alternatives
• Vague answers about fees or commissions
• Encouraging you to borrow the maximum
• Promising guaranteed approval
• Suggesting you leave out information on your application

Why a broker matters more in 2026

2026 has been a big year of change:

• The cash rate rose four times to 4.60%
• APRA introduced a debt-to-income limit from February
• The 5% Deposit Scheme expanded with no income caps
• New negative gearing and CGT laws passed
• SMSF residential borrowing was banned from August

With so many moving parts, an experienced broker who keeps up with the changes can make a real difference.

Broker or bank?

A bank can only offer its own products. A broker can compare many lenders. That doesn't mean a broker will always find a cheaper loan than your bank, but it means you'll see more options before you decide.

Local knowledge matters

If you're buying in NSW, a broker who knows the local market understands things like scheme price caps by postcode, valuation issues in certain suburbs and NSW stamp duty rules. Local experience can help avoid surprises.

What to bring to your first meeting

To get the most from your first chat, have these ready:

• Recent payslips or tax returns
• Bank statements showing savings
• Details of debts, like credit cards and car loans
• A rough idea of your budget and goals

This helps your broker give you a realistic picture from the start.

Frequently asked questions

Does using a broker cost me anything?

For most home loans, brokers are paid by the lender, so there's no direct cost to you. Some brokers charge fees for complex loans. They must tell you upfront.

Can a broker get me a better rate than my bank?

Often, yes, but not always. The value is in comparing the market and finding the right fit.

How do I check a broker's licence?

You can search ASIC's Professional Register for credit licensees and representatives.

Should I use more than one broker?

It's usually best to choose one broker you trust. Multiple brokers can lead to multiple credit enquiries.

Talk to Awesome Lending Solutions

Every situation is different, and the right loan depends on your goals, income and timing. At Awesome Lending Solutions, we compare a wide panel of lenders and explain your options in plain English, with no pressure. Call us on 02 7904 9560 or visit awesomelendingsolutions.com.au to book a chat.

This article is general information only. It does not consider your objectives, financial situation or needs, and it is not financial, tax or legal advice. Scheme rules, interest rates and laws were current as at October 2026 and can change. Speak with a licensed professional before making any decision. Albert Waldron is a Credit Representative (CR 407514) of AFG's Australian Credit Licence 389087.

Home Loan Interest Rates in Australia and NSW: What Drives Them in 2026

This article first appeared on awesomelendingsolutions.com.au.

Interest rates have a huge impact on your home loan repayments. In 2026, rates have been rising, and many Australians are feeling the pinch. Understanding how rates are set, and why your rate might be different from someone else's, can help you get a better deal.

Where rates are in 2026

The Reserve Bank of Australia (RBA) raised the cash rate four times in 2026: in February, March, May and September. On 29 September 2026, it lifted the cash rate by 0.25% to 4.60%, its highest level since late 2011. The RBA said inflation remained too high and left the door open to further rises.

Most lenders passed these increases on to variable rates. That means many borrowers are paying hundreds of dollars more a month than at the start of the year.

How home loan rates are set

Your home loan rate isn't the same as the cash rate. Lenders set their own rates based on:

• The cash rate – the RBA's main tool
• Funding costs – what it costs the lender to borrow money
• Competition – how hard lenders are chasing new customers
• Risk – the type of loan and borrower
• Regulation – capital and lending rules from APRA

Why your rate may differ

Two people can borrow from the same lender on the same day and get different rates. That's because rates depend on:

• Loan to Value Ratio (LVR) – lower LVRs usually get better rates
• Loan purpose – owner-occupied loans are usually cheaper than investment loans
• Repayment type – principal and interest is usually cheaper than interest-only
• Loan size – bigger loans may get larger discounts
• Rate type – fixed and variable rates are priced differently
• When you took out the loan – new customers often get better rates than existing ones

Are rates different in NSW?

Most lenders offer the same rates across Australia. However, NSW borrowers tend to have larger loans because of higher property prices. A larger loan means each rate change has a bigger dollar impact. On a $800,000 loan, a 0.25% increase adds roughly $130 a month to repayments.

How to get a better rate

1. Ask your lender for a rate review. Many lenders will lower your rate if you ask, especially with a competing offer.
2. Compare the market. New customer rates are often lower.
3. Lower your LVR. Extra repayments or a higher valuation can unlock better pricing tiers.
4. Consider refinancing. If your lender won't move, switching could save thousands.
5. Check your loan type. Moving from interest-only to principal and interest can reduce your rate.

Fixed or variable in a rising rate market?

When rates are rising, some borrowers choose to fix for certainty. Fixed rates are based on what lenders expect rates to do in the future, so they're not always lower than variable rates. A split loan can give you some certainty while keeping flexibility.

Planning for further rises

The RBA has said it may raise rates again if needed. To prepare:

• Build a buffer in an offset account
• Test your budget at a rate 0.5% to 1% higher
• Cut unnecessary spending
• Talk to your lender early if you're struggling

An example

Emily has a $700,000 variable loan. At the start of 2026, her rate was 5.64%. After four rises of 0.25% each, her rate is 6.64%.

• Repayments at 5.64% over 30 years: about $4,040 a month
• Repayments at 6.64%: about $4,490 a month
• Increase: about $450 a month

By refinancing to 6.14%, she cuts her repayments to about $4,260, saving around $230 a month.

What the serviceability buffer means

When you apply for a loan, lenders test whether you could afford repayments at your rate plus 3%. As rates rise, this test gets harder to pass, which can reduce how much new borrowers can borrow.

Rates and your borrowing power

Higher rates don't just affect existing borrowers. They also reduce how much new buyers can borrow, because lenders test repayments at a higher assessment rate.

Frequently asked questions

Will rates go down?

No one knows for sure. The RBA has signalled more rises are possible if inflation stays high.

Do lenders pass on rate rises in full?

Usually, but not always. Some lenders pass on more or less than the RBA change.

Should I fix my rate now?

It depends on your budget and need for certainty. Compare fixed rates with variable and consider a split.

How can I find out what rate I could get?

A broker can give you real rate quotes based on your LVR, loan type and situation.

Talk to Awesome Lending Solutions

Every situation is different, and the right loan depends on your goals, income and timing. At Awesome Lending Solutions, we compare a wide panel of lenders and explain your options in plain English, with no pressure. Call us on 02 7904 9560 or visit awesomelendingsolutions.com.au to book a chat.

This article is general information only. It does not consider your objectives, financial situation or needs, and it is not financial, tax or legal advice. Scheme rules, interest rates and laws were current as at October 2026 and can change. Speak with a licensed professional before making any decision. Albert Waldron is a Credit Representative (CR 407514) of AFG's Australian Credit Licence 389087.

11 Questions to Ask Before Getting a Home Loan

Updated October 2026 by Albert Waldron, Awesome Lending Solutions. This article first appeared on awesomelendingsolutions.com.au.

Getting a home loan is one of the biggest financial decisions you'll make. Yet many people focus on the fun part, finding the home, and skip the questions that really shape their future. Here are 11 questions to think through before you apply.

1. Would I qualify for a home loan?

Lenders look at your income, expenses, debts, credit history and deposit. They also check you could still afford repayments if your rate rose by 3%. A broker can give you a realistic idea before you apply.

2. How much can I comfortably afford?

What a lender will approve and what feels comfortable can be very different. With the cash rate at 4.60% after four rises in 2026, test your budget at a rate 0.5% to 1% higher than today's.

3. Am I better off buying than renting?

Buying lets you build equity instead of paying rent, and that equity can later help you buy again or invest. But buying has upfront costs and ongoing costs like rates, insurance and maintenance. Compare both honestly.

4. How much deposit do I need?

Often 5% to 20%. First home buyers may be able to use the 5% Deposit Scheme with no Lenders Mortgage Insurance (LMI). Single parents may qualify for the Family Home Guarantee with just 2%.

5. What government help am I eligible for?

In NSW, first home buyers pay no stamp duty on homes up to $800,000, and the First Home Owner Grant may apply to new homes. Check what applies to you before you set your budget.

6. Fixed, variable or split?

Variable rates give flexibility. Fixed rates give certainty. A split gives you some of both. The right choice depends on your budget and plans.

7. Do I need an offset account?

If you'll keep savings in the bank, an offset account can save a lot of interest while keeping your money available.

8. What fees will I pay?

Look beyond the interest rate. Check application, annual, valuation and discharge fees. The comparison rate gives a better picture of total cost.

9. What are the other costs of buying?

Budget for conveyancing, inspections, insurance, moving and, if you're not exempt, stamp duty.

10. What happens if my circumstances change?

Think about future plans like having children, changing jobs or starting a business. Choose a loan with enough flexibility, and keep a buffer for surprises.

11. Who will help me through the process?

A good broker compares lenders for you, explains your options and handles the paperwork. Under the Best Interests Duty, brokers must act in your best interests.

Frequently asked questions

Should I talk to a broker before I start looking?

Yes. Knowing your budget and getting pre-approval early helps you buy with confidence.

Does asking questions affect my credit score?

No. A conversation doesn't involve a credit check. Only a loan application does.

How long does approval take?

Pre-approval often takes a few days to two weeks, depending on the lender and your documents.

Talk to Awesome Lending Solutions

If you'd like help answering these questions for your own situation, we're happy to walk you through them, with no pressure. Call us on 02 7904 9560 or visit awesomelendingsolutions.com.au to book a chat.

This article is general information only. It does not consider your objectives, financial situation or needs, and it is not financial, tax or legal advice. Scheme rules, interest rates and laws were current as at October 2026 and can change. Speak with a licensed professional before making any decision. Albert Waldron is a Credit Representative (CR 407514) of AFG's Australian Credit Licence 389087.

Why Your Bank Can Raise Rates Even When the RBA Doesn't

Updated October 2026 by Albert Waldron, Awesome Lending Solutions. This article first appeared on awesomelendingsolutions.com.au.

Many borrowers assume their home loan rate only moves when the Reserve Bank (RBA) changes the cash rate. That's not always true. Banks can, and sometimes do, change rates on their own. Here's why that happens and what you can do about it.

What the RBA controls

The RBA sets the cash rate, which is the rate banks charge each other for overnight loans. It's the RBA's main tool for managing inflation. In 2026, the RBA raised the cash rate four times, taking it to 4.60% at the end of September, its highest level since 2011.

When the cash rate moves, most lenders follow quickly. But the cash rate is only one part of what it costs a bank to lend you money.

Why banks can raise rates when the RBA doesn't

1. Funding costs

Banks get money from deposits and from borrowing in Australian and overseas markets. If those costs rise, banks may pass them on, even if the cash rate stays the same.

2. Regulation

The banking regulator, APRA, sets rules on how much capital banks must hold and how they lend. Back in 2015, APRA's limits on investor lending led many banks to raise investor and interest-only rates outside the RBA cycle. In February 2026, APRA introduced a new limit on loans where total debt is six or more times income. Rules like these can affect how banks price certain loans.

3. Risk and loan type

Banks price investor, interest-only and high-LVR loans differently. They may lift rates on one type of loan to slow demand.

4. Competition and profit

Banks also set rates based on how hard they're competing for customers and their own profit targets.

Why new customers often get better rates

Many lenders offer sharper rates to attract new borrowers than they give existing ones. Over time, a loyal customer can end up paying noticeably more than someone who just walked in the door. This is sometimes called the "loyalty tax".

What you can do

1. Know your rate. Check your latest statement.
2. Compare it with new-customer rates for a loan like yours.
3. Ask your lender for a rate review. Many will lower your rate if you ask, especially with a competing offer.
4. Consider refinancing if your lender won't move.
5. Use an offset account to reduce the interest you pay.
6. Think about a split loan if you'd like some certainty while rates are rising.

An example

Lisa's $600,000 variable loan was at 6.64% after the 2026 rises. New customers with a similar loan were being offered about 6.14%. Her broker asked her lender for a review, and when they wouldn't match it, helped her refinance. Her repayments fell by about $200 a month.

Frequently asked questions

Can my bank raise my rate without the RBA moving?

Yes. Variable rates can change at any time. Your lender must tell you about the change.

Do banks always pass on RBA rate cuts in full?

Not always. Some pass on more or less, and timing can vary.

How often should I check my rate?

At least once a year, and after every RBA change.

Talk to Awesome Lending Solutions

We can check your rate against the market and, if there's a better deal, help you get it, whether that's with your current lender or a new one. Call us on 02 7904 9560 or visit awesomelendingsolutions.com.au to book a chat.

This article is general information only. It does not consider your objectives, financial situation or needs, and it is not financial, tax or legal advice. Rules, interest rates and laws were current as at October 2026 and can change. Speak with a licensed professional before making any decision. Albert Waldron is a Credit Representative (CR 407514) of AFG's Australian Credit Licence 389087.