The Reserve Bank of Australia meets next week to decide the fate of the Australian borrowing rate. Some have gone further than simply tipping a modest cut, with estimates pointing to a potential 0.5% cut. But some banks aren’t waiting around as they attempt to grow their mortgage book with solid investments.

Three of the four major banks reported results last week, and in each of them, similar themes emerged. Banks are looking apprehensively towards the horizon as geopolitical swings rapidly move markets, but they’re also looking closely at their margins, too. All banks are looking to squeeze their margins to drive profit in 2025 as their prices collectively soar amid a flight to perceived safety.

That means they need a solid pipeline of good borrowers on mostly fixed rates to drive their strategy forward. Fixed-rate loans offer ongoing income certainty to banks, and with funding currently plentiful, margin-wary institutions are likely looking to lock in more customers than keep them variable. The solution? Cut fixed rates, of course.

Most major banks have already started slashing fixed interest rates and contacting customers to tempt them into refinancing.

NAB, ANZ and AMP,

Bank of Queensland is going hell-for-leather, currently offering two-year fixed rates of 4.99% to customers with an 80% LVR. It’s the only bank that’s currently offering rates starting with a “4” in the country, with the next lowest coming from ME Bank at 5.19%

According to Money, the typical Australian is carrying roughly $665,000 on their mortgage at an interest rate of around 6.24%. That makes monthly repayments around $4400 each time. A switch to fixed for a period of two years at just 5.5%, as an example, could see that average Australian save around $300 a month on their mortgage. Money that could be popped back into the date-night fund for many DINKs or into the weekend fund for families.

With rates already dropping on fixed products, however, it’s tough to predict if all mortgage products would see a subsequent price drop if the RBA’s 0.5% rate cut comes to pass.

There are a lot of economic data-related hurdles we need to jump over before this week we can officially lock in that big 0.5% rate cut from the RBA. But from what we’re seeing from first- and second-tier banks, maybe we don’t have to wait?