How to benefit from the coming mortgage price war

August 2, 2026 — 7:00pm

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There haven’t been many good news stories for home loan borrowers lately, as most of the focus has been on rising interest rates and falling house prices.

However, the housing slump may also bring something of a silver lining to the 3.3 million-odd households with mortgages. As mortgage lending slows, it’s forcing banks to compete more aggressively, giving customers the opportunity to save on their home loan. On current trends, it looks like there’s a mortgage price war coming.

But unlike other price wars that occasionally break out in the supermarket aisles, for example, borrowers who go about their business as usual won’t automatically benefit from this bout of interbank hostilities.

No, price wars between banks are different. To get the lowest interest rates, customers need to be more active, whether that’s by haggling, threatening to leave their bank, or even moving their business elsewhere.

That is especially true with this latest step-up in competition between banks, which appears to be less overt and less aggressive than the post-COVID mortgage war of 2022 and 2023. There are savings to be had, but borrowers will probably have to seek them out.

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Australia’s $2.5 trillion mortgage market is always a key battleground for banks because it’s the biggest source of bank loans in the country. Lately, however, the intensity of competition has lifted.

Banks all want to expand their loan portfolios, but there is simply less growth to go around........

© The Age