Banks are taking a targeted approach to customer retention, explains AMP Bank’s Michael Christofides
With interest rates facing an uncertain course in 2026, Australian mortgage pricing is similarly facing uncertainty.
Although recent inflation statistics have taken some pressure off policymakers, the possibility of RBA raising the cash rate has emerged.
Commonwealth Bank is among the banking giants tipping at least one 25-basis-point increase from the Reserve Bank of Australia (RBA), while NAB believes two rate rises are on the agenda.
Westpac and ANZ, meanwhile, still reckon the RBA’s Monetary Policy Committee will stick to the script and keep rates at their current 3.6% level.
The RBA hiking rates would have been an unthinkable scenario a few months back, but it goes to show how unpredictable things have become in the new year for brokers and the wider mortgage finance industry.
A competitive landscape
Michael Christofides (pictured), AMP Bank’s director of lending and everyday banking, believes the mortgage market will become more competitive in 2026, but he also sees the very nature of the competitive landscape shifting into new territories.
“Price still matters, but process and certainty are becoming an important differentiator,” he says. “Brokers want confidence that what’s promised at the start is what gets delivered at the end.”
Additionally, while a higher cash rate will certainly increase pressure across the system, pricing will not necessarily move in a straight line.
“Lenders will continue balancing funding costs, competitive dynamics and customer retention,” says Christofides.
“We’re already seeing a more targeted approach – sharper offers in specific customer segments rather than broad market moves. For brokers, that means understanding where lenders are leaning in, so you can match clients to the right solutions without getting too caught up in short‑term pricing change.
“Borrowers are more informed and more mobile, but many are under sustained affordability pressure. That’s sharpening the focus on features like offsets, repayment flexibility, loan structuring and strong digital servicing – all of which increasingly shape broker recommendations.”
A force for good
Christofides sees competition as a force for good that lifts standards across the industry. “It should mean fewer surprises, less rework, and a better experience for customers – not just louder marketing,” he adds.
He explains that rather than reacting to every rate move, strong banks stay anchored to fundamentals – funding costs, credit quality and long‑term customer outcomes.
“Uncertainty is a reminder to be clear on your strategy and to be a consistent, reliable partner for brokers and their clients navigating the same conditions,” he says.
Christofides also sees market uncertainty as also elevating the role of brokers, as the priority shifts to long-term suitability, not just the headline rate.
“Helping customers understand flexibility, future repayment capacity and how a loan fits into their broader goals is critical.
“Brokers who simplify complexity and partner with lenders that value transparency, consistent credit decisioning and dependable turnaround times will be best placed to thrive.
“From AMP’s perspective, we see brokers as essential to helping customers make confident decisions - especially when the environment is shifting.”
