New Financial Year, New Loan Strategy: What Borrowers Should Review in July
1 July starts the FY26-27 financial year, and with it, a set of tax, super and lending-related changes that may affect how borrowers plan, manage cash flow and prepare for loan applications. Most borrowers review their tax return in July and forget their mortgage entirely. A simple home loan review at the start of the financial year can often reveal opportunities to improve loan structure or reduce costs.
What Actually Lands on 1 July
1 July 2026: The personal tax rate on taxable income between $18,201 and $45,000 drops from 16% to 15%, lifting take-home pay slightly for many working borrowers.
1 July 2026: Payday Super is scheduled to commence from 1 July 2026, with super guarantee contributions required to be received by employees' super funds within seven business days after payday. This change may affect cash flow planning for business owners with employees.
1 July 2026: The government has proposed making the $20,000 instant asset write-off permanent for eligible small businesses. However, the measure has not yet become law, so business owners should confirm the current rules with their accountant before relying on it.
1 July 2027: Under the proposed rules, losses on established residential investment properties purchased after 7:30 pm AEST on 12 May 2026 would only be deductible against residential property income. Properties held or under contract before 7:30 pm AEST on 12 May 2026 are expected to be grandfathered under the proposed rules.
Four Things Worth Reviewing This Month
Has your rate quietly drifted above the market?
The RBA cash rate reached 4.35% following the February, March and May 2026 rate increases and remained at that level in June. Lenders continue to adjust pricing and offers across different borrower profiles.
A loan that looked competitive in January can sit meaningfully above what new customers are offered by July, and many borrowers only discover better pricing after requesting a rate review or comparing lenders. Many borrowers use this time of year to explore refinancing options, and for some, reviewing refinancing home loan Australia can help determine whether a more competitive loan structure is available.
Does your loan structure still match how you're actually earning?
If your income shifted this year, through a new role, increased overtime, or a stronger trading year for your business, your borrowing power Australia position may have changed too. For borrowers considering a self-employed home loan strategy in Australia, a stronger FY26 may create more options to review, as some lenders assess recent business income differently. The right approach depends on the lender’s policy, documentation and overall servicing.
Are you positioned correctly for the negative gearing cut-off?
If buying an investment property is part of your FY26–27 plan, the 12 May 2026 budget night line may become important if the proposed rules are legislated. Established properties purchased after that date could face a different tax treatment from 1 July 2027 than properties purchased before it, so timing may affect long-term outcomes if the proposal becomes law.
Could Payday Super affect your business cash flow?
Business owners with employees should review cash flow now that superannuation is paid each payday rather than quarterly. The timing shift may affect how comfortably business income and commitments stack up in a loan application.
Even a 0.25% to 0.50% difference between your current rate and available options can add up over time, especially on a larger loan balance. That gap is often only discovered when borrowers actively review their loan.
Where KM Financial Service Fits In
Kris Menon and the KM Financial Service team bring 20+ years of experience as a mortgage broker Australia borrowers trust, with access to more than 50 lenders across the country. Backed by 400+ 5-Star Google Reviews and 400+ 5-Star RateMyAgent Reviews. A proper July review covers your current rate against the market, whether your loan structure still fits your income, and what the negative gearing timeline means for any purchase you're planning this year.
Book a free loan review with KM Financial Service. Follow KM Financial Service on Instagram, Facebook, and LinkedIn for ongoing updates through the new financial year.
Frequently Asked Questions
Q: Is July actually the best time to review my home loan?
Answer: It's a practical trigger point since most people are already reviewing finances for tax time, but a rate or structure review is worth doing any time your income or the market shifts.
Q: Will the new tax rate change my borrowing capacity?
Answer: Slightly. The 16% to 15% bracket cut increases take-home pay marginally, which can have a small positive effect on serviceability calculations for some borrowers.
Q: Does the negative gearing change affect a property I already own?
Answer: Properties held or under contract before 7:30 pm AEST on 12 May 2026 are expected to be grandfathered under the proposed rules. However, investors should confirm the final legislation and seek independent tax advice before making decisions.
