Major banks upstaged in rate response as 110 lenders under the microscope

Michele Bullock, Governor, Reserve Bank of Australia. Picture: Monique Harmer

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Multiple banks moved to cut rates following the RBA’s August decision to slash the cash rate from 3.85 per cent to 3.60 per cent, with two lenders passing on a full 25 basis point reduction within minutes.

Athena and Macquarie were the first to announce, bringing their new best variables down to 5.44 per cent. They were quickly followed by Australian Unity Bank, who will have a new best variable of 5.34 per cent and RACQ Bank, who will lower to 5.29 per cent. Arab Bank Australia soon announced it would cut too.

Commonwealth bank was the first of the majors to announce, dropping their new lowest variable rate to 5.39 per cent, followed by Westpac and then NAB and ANZ.

The news came after 18 banks recently passed on out of cycle rate cuts to their fixed rate products.

Those included Bank of Qld (BOQ), Greater Bank, The Mutual Bank, Easy Street Fin Services, Regional Australia Bank, BankVic, Pacific Mortgage Group, Hume Group, Macquarie Group, Police Bank, GMCU, Australian Mutual Bank, Community First Bank, Queensland Country Bank, ME Bank, Police Credit Union, Summerland Bank and Bank of China.

Many more banks were expected to follow variable rate cuts in quick succession.

Banks have been generous in passing on cuts in full since the RBA first moved in February this year, but we are about to find out whether that will continue as we wait for all 110 lenders being monitored by Finder to notify their customers of their own rate decisions.

The goodwill to borrowers may run out soon according to Finder’s head of consumer research Graham Cooke.

“While it was encouraging to see most lenders pass on the full cut during the past two rate moves – a rare sight historically – a third full pass-through would be unlikely,” Cooke said.

“For borrowers, another cut offers meaningful relief. The average homeowner could save around $100 per month on their mortgage, on top of the $200 already saved from earlier cuts. This financial breathing room is likely to lift consumer sentiment and support renewed interest in the housing market, with Finder research showing that 60 per cent of recent buyers were influenced by falling rates. However, it’s a different story for savers and retirees, who face even lower returns, and for renters, who continue to be left behind.

MORE: Rate cut to trigger buyer boom

Finder head of consumer research Graham Cooke.

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“Looking ahead, one more cut is expected this year – likely in November – bringing the total reduction to a full percentage point. The RBA has done its part. Now the banks need to do theirs.”

The decision to cut rates by 25 basis points for the third time this year to now sit at 3.60 per cent has experts predicting positive flow-on effects to property values.

“While affordability remains severely constrained, the underlying market pressure of persistent housing undersupply relative to population growth remain in place,” said REA Group senior economist Eleanor Creagh. “We expect home prices to continue rising in the months ahead, albeit at a more moderate pace than seen in previous easing cycles.

“With interest rates moving lower this year, momentum in the housing market has strengthened, marking a turnaround from the slower conditions observed in late 2024. Renewed buyer sentiment, supported by earlier rate cuts and the prospect of further reductions is underpinning this recovery.”

A number of lenders have recently lowered their fixed rate offerings, but Mortgage Choice CEO Anthony Waldron said the vast majority of borrowers were looking for a variable rate product.

REVEALED:18 banks drop rates into 4 per cent range

Anthony Waldron, CEO of Mortgage Choice.

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“Mortgage Choice home loan submission data reveals that the current interest rate environment has seen fixed rates stay firmly out of fashion, with a staggering 98 per cent of submissions in July being for variable rate home loan products. And nearly a third of submissions (31 per cent) in July were from borrowers looking to refinance,” Waldron said.

“The latest cash rate cut should boost the borrowing capacity of buyers hoping to enter the market this spring. Buyers hoping to succeed in a hot market should get expert advice early on. The latest Mortgage Choice Home Loan Report (revealed) more than 50 per cent of borrowers wish they’d done more homework when choosing their first home loan.”

See the full list of lenders who have passed on the rate cut to their variable rate loans here (Assuming owner occupier loan, LVR 80 per cent, variable rate)

Banks who have cut, new best rate (%), effective date

ANZ: 5.5- 22 August

CommBank: 5.64- 22 August

NAB: 5.69- 25 August

Westpac: 5.44 -26 August

Arab Bank Australia: 5.35- 26 August

Athena: 5.49- 12 August

Australian Unity: 5.39- 21 August

Bank Australia: 5.39- 21 August

Bank of Melbourne: 5.64- 26 August

BankSA: 5.64- 26 August

Bankwest: 5.59- 22 August

Border Bank: 5.09- 22 August

Coastline Credit Union: 6.49- 22 August

ING: 5.39- 26 August

Macquarie Bank: 5.44- 15 August

Pepper Money: 6.34- 28 August

RACQ Bank: 5.29- 26 August

St. George: 5.64- 26 August

Unloan: 5.24- 12 August

Shame list: Banks yet to pass on cut

Adelaide Bank: 5.79- 6 June

AMP: 5.64- 2 June

Aussie: 5.64- 6 June

Australian Military Bank: 6.64- 3 June

Australian Mutual Bank: 5.49- 1 June

AusWide Bank: 5.69- 5 June

Bank First: 5.59- 29 May

Bank of China: 5.43- 3 June

Bank of Sydney: 5.54- 3 June

Bank of us: 5.69- 11 June

Bank Orange: 5.64- 2 June

BankVic: 5.6- 3 June

BankWAW: 5.49- 3 June

BCU Bank: 5.54- 10 June

Bendigo Bank: 5.64- 6 June

Beyond Bank: 5.79- 3 June

Bluestone: 6.69- 11 June

BOQ: 5.63- 6 June

Broken Hill Bank: 6.39- 4 June

Cairns Bank: 5.79- 4 June

Central Murray Credit Union: 5.74- 2 June

Central West Credit Union: 6.49- 29 May

Community First Bank: 5.49- 11 June

Credit Union SA: 5.79- 4 June

Defence Bank: 6.09- 28 May

Dnister: 5.79- 3 June

Easy Street: 5.59- 4 June

Family First Bank: 5.65- 16 June

Fire Service Credit Union: 5.59- 1 June

Firefighters Mutual Bank: 5.59- 1 June

Firstmac: 5.78- 3 June

First Option Bank: 5.69- 2 June

Freedom Lend: 5.39- 16 June

G & C Mutual Bank: 5.49- 1 June

Gateway Bank: 6.04- 27 May

Geelong Bank: 5.99- 30 May

Goulburn Murray Credit Union: 5.69- 3 June

Greater Bank: 5.49- 30 May

Great Southern Bank: 5.74- 3 June

Heritage Bank: 5.59- 30 May

Homeloans: 5.99- 11 June

HomeStar Finance: 5.59- 16 June

Horizon Bank: 5.54- 1 June

HSBC: 5.59- 2 June

Hume Bank: 5.59- 2 June

Illawarra Credit Union: 5.49- 4 June

IMB: 5.54- 30 May

Laboratories Credit Union: 5.85

La Trobe: 5.89- 22 May

Liberty Financial: 5.99- 3 June

loans.com.au: 5.54- 3 June

ME: 5.63- 7 June

Mortgage House: 5.44- 6 June

MOVE Bank: 5.54- 1 June

MyState Bank: 5.69- 5 June

Newcastle Permanent: 5.49- 30 May

NICU: 5.49- 1 June

NRMA Insurance Home Loan: 5.53- 6 June

P & N Bank: 5.69- 10 June

Pacific Mortgage Group: 5.39- 2 June

People’s Choice Credit Union: 5.49- 30 May

Police Bank: 5.34- 27 May

Police Credit Union: 4.99- 1 June

Qantas Money: 5.68- 6 June

QBank: 5.59- 6 June

Qudos Bank: 5.44- 29 May

Queensland Country Bank: 5.49- 4 June

Reduce: 5.59

Regional Australia Bank: 5.59- 4 June

resi: 6.18- 20 May

RESIMAC Financial Services: 5.99- 11 June

Southern Cross Credit Union: 5.73- 1 June

South West Slopes Bank: 6.1- 3 June

Sucasa: 5.89- 16 June

Summerland Bank: 5.59- 3 June

Suncorp: 5.65- 30 May

Teachers Mutual Bank: 5.59- 1 June

The Capricornian: 5.39- 6 June

The Mac: 5.42- 4 Jun

The Mutual Bank: 5.49- TBC

Tiimely Home: 5.54- 6 June

Transport Mutual Credit Union: 5.39- 2 June

Ubank: 5.69- 29 May

UniBank: 5.59- 1 June

Unity Bank: 5.59- 1 June

Up Home Loan: 5.45- 1 June

Virgin Money: 5.54- 6 June

Warwick Credit Union: 5.89- 4 June

Well Money: 5.69- 6 June

Yard: 5.64- 6 June

Yellow Brick Road: 6.59- 20 May