Major banks upstaged in rate response as 110 lenders under the microscope
Athena and Macquarie were the first to announce, bringing their new best variables down to 5.64 per cent and 5.44 per cent respectively. 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.
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 Athena and Macquarie in cutting their variable rates in quick succession with NAB, ANZ, CBA and Westpac, all having passed on the first two rate cuts of the year within a half-hour of the official announcement by RBA Governor Michelle Bullock.
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.
'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.
'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
Athena: 5.64
Australian Unity: 5.39
Macquarie Bank: 5.44
RACQ Bank: 5.29
Shame list: Banks yet to pass on cut
ANZ: 5.75- 30 May
CommBank: 5.64- 30 May
NAB: 5.94-
Westpac: 5.69- 3 June
Adelaide Bank: 5.79- 6 June
AMP: 5.64- 2 June
Arab Bank Australia: 5.6- 3 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 Australia: 5.64- 2 June
Bank First: 5.59- 29 May
Bank of China: 5.43- 3 June
Bank of Melbourne: 5.89- 3 June
Bank of Sydney: 5.54- 3 June
Bank of us: 5.69- 11 June
Bank Orange: 5.64- 2 June
BankSA: 5.89- 3 Jun
BankVic: 5.6- 3 June
BankWAW: 5.49- 3 June
Bankwest: 5.84- 30 May
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
Border Bank: 5.34- 27 May
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
Coastline Credit Union: 6.74- 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
ING: 5.64- 3 June
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
Pepper Money: 6.59- 5 June
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
St. George: 5.89- 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
Unloan: 5.49- 20 May
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
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