On August 2025, the Reserve Bank of Australia (RBA) lowered the official cash rate by 0.25 percentage points, bringing it down to 3.60%. This move aims to support the economy by making borrowing cheaper, but what does it mean for everyday Australians and their finances?
Here’s a quick breakdown of how the Big Four banks are reacting to this change, along with some advice if you’re considering switching banks or adjusting your mortgage.
Commonwealth Bank (CBA)
Commonwealth Bank was the first to respond, with Retail Group Executive Angus Sullivan stating:
“With now three rate cuts this year, Australian borrowers are getting some breathing room back in their budgets.”
He noted that many people are benefiting differently — some easing everyday expenses, others paying off home loans faster.
Westpac
Westpac announced adjustments not just to home loan interest rates, but also to deposit account rates, aiming to offer more competitive options to customers. Detailed updates are expected soon.
ANZ
ANZ confirmed that variable interest rates on its Australian home loans will decrease following the RBA’s decision. This change should help homeowners lower their monthly repayments.
What About Other Banks?
The National Australia Bank (NAB) has yet to release an official response. Other lenders like Bank of Queensland, Bendigo Bank, ING, Macquarie, St George, and Suncorp typically update their rates shortly after the RBA’s announcement. It’s a good idea to check their official channels for the latest.
How Will This Affect Your Mortgage Repayments?
Lower interest rates usually mean smaller monthly repayments on variable-rate home loans. You can use online mortgage calculators to estimate the impact on your payments based on the new rate.
Thinking of Switching Banks?
If you’re considering moving your home loan to another bank, the federal government’s MoneySmart website offers useful advice:
- Ask your current lender for a better deal. Let them know you’re shopping around; they may offer lower rates to keep your business.
- Check loan terms carefully. Some lenders require a 25 or 30-year term for refinancing.
- Understand mortgage insurance costs (LMI). If your home equity is less than 20%, switching loans may require paying LMI, adding to costs.
Final Thoughts
With the RBA easing interest rates, it’s an excellent time for Australian borrowers to review their finances. Whether it’s negotiating with your current lender, switching banks, or simply planning your repayments better, stay informed and take advantage of the current market conditions.