RBA holds the cash rate at 4.35%, what should borrowers do next?

The Reserve Bank of Australia (RBA) has left the cash rate unchanged at 4.35% for a second consecutive meeting.

That's a welcome pause for mortgage holders after three 0.25 percentage point increases earlier in 2026. But the RBA has not ruled out another rate rise, with inflation still a concern.

For homeowners, there's little value in trying to predict exactly what the RBA will do next. A better starting point is to look at your own home loan and see whether it still offers competitive value.

Here are some steps you can take now.

Start by finding out exactly what interest rate you're paying.

Review your mortgage statement to find out your current rate. Check whether it's changed recently and whether you're still receiving any discount that was applied when you took out the loan.

Then compare your rate with similar home loans currently available.

The rate you were happy with a few years ago may no longer be competitive. Your circumstances may have changed, too. If you've paid down your mortgage or your property has increased in value, your loan-to-value ratio (LVR) may have improved, potentially giving you access to more competitive rates.

You can also run a quick health check to see how your rate compares to the market.

You don't necessarily have to refinance to get a lower rate.

If you've found comparable loans offering lower rates, ask your current lender whether it can review your pricing.

Your lender may offer you a lower rate to retain you as a customer. This can be considerably simpler than refinancing, although it's still worth checking whether the revised rate is competitive with the broader market.

If your lender won't budge, you can then look at your refinancing options.

If you're paying more than comparable borrowers, it may be worth shopping around.

Don't compare the interest rate alone. Look at the comparison rate, fees and features as well.

An offset account, redraw facility or flexible repayment options can be valuable depending on how you manage your mortgage.

You should also check whether you're eligible for the advertised rate. Some of the lowest rates are available only to borrowers meeting specific LVR, loan size or other eligibility requirements.

The right comparison is between your current loan and a loan you could realistically qualify for.

Refinancing can make sense if you can reduce your interest rate enough to outweigh the costs of switching.

For example, a 0.50 percentage point reduction on a $700,000 mortgage could mean roughly $3,500 less in interest over a year, before allowing for changes in the loan balance and other factors.

But there can be costs involved in refinancing, including discharge fees, application fees and other lender charges.

If you're currently on a fixed rate, check whether breaking the loan early would result in a break cost.

Work out the potential saving over the period you expect to keep the loan, rather than focusing only on the repayment size.

You may not need to do anything. If your interest rate is competitive, your loan features suit your needs and refinancing costs would outweigh the potential savings, staying with your current lender could make sense. But you could still contact your lender and ask whether it can offer a sharper rate.

It's also worth checking your loan structure. If you have an offset account, check whether it is linked correctly and that you're keeping enough money in it to make the feature worthwhile.

If you have redraw available, check how much you've paid ahead and understand the conditions that apply to accessing those funds.

A lower-rate basic loan can sometimes be better value than a loan with an offset if you don't maintain a meaningful balance in the offset.

The RBA's next move could be a hike, a hold or, eventually, a cut. Forecasts can change quickly as new inflation, employment and economic data comes in.

Rather than trying to time your mortgage around the next RBA announcement, look at whether your current loan is competitive now. If you can save a meaningful amount by refinancing and the numbers stack up, you don't necessarily need to wait.

If your current loan is already competitive, there's no need to switch simply because another lender is advertising a lower rate.

Your circumstances, not the RBA forecast, should drive the decision.

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