Multiple lenders roll out previously announced rate reductions
Millions of borrowers with variable home loans from Commonwealth Bank (CBA), National Australia Bank (NAB), and ANZ have seen their interest rates decrease on Friday as the banks implement a 0.25 percentage point cut following the Reserve Bank of Australia’s (RBA) recent cash rate decision.
The reduction means interest charges for affected borrowers are now to be calculated at a lower rate. However, Westpac customers will need to wait until Tuesday for their rate cut to take effect.
Macquarie Bank has also lowered its variable rates, along with CBA subsidiary Bankwest, ANZ-owned Suncorp, and Teachers Mutual Bank, among others.
According to financial comparison site Canstar, 24 lenders have already reduced their variable rates following the RBA’s “hawkish” interest rate cut a couple of weeks ago. Nearly 50 lenders have announced rate cuts that are yet to take effect.
For most borrowers, the lower rates now apply, but many banks will keep repayments unchanged unless customers request a reduction. Even for those who ask for lower repayments, the adjustment will not be immediate. Westpac and Macquarie automatically update direct debit payments for customers on minimum repayments, but the change will not be reflected until late March or April, depending on billing cycles.
Canstar’s analysis indicates that a borrower with a $600,000 mortgage and 25 years remaining would see their minimum monthly repayment drop by approximately $92 due to the RBA’s February rate cut.
Of the lenders that have already implemented cuts, Canstar’s data shows that the lowest current variable rate (excluding introductory offers and green loans) is 5.59%, available from Police Bank for first-home buyers and Pacific Mortgage Group. Fourteen lenders now offer at least one variable rate under 5.75%, a number that could increase as more banks announce changes. Once all lenders adjust their rates, the estimated average variable rate for owner-occupiers will be 6.07%.
Major banks expect further rate reductions. NAB predicts the RBA will lower the cash rate four more times, bringing it to 3.1% by February 2026. CBA and Westpac both forecast a rate of 3.35% by year-end, while ANZ anticipates only one more cut, reducing the cash rate to 3.85%.
“The home loan is at the front of mind for a lot of families right now, so it’s prime time to give yours a health check,” said Sally Tindall (pictured above), data insights director at Canstar. “There are already 14 lenders offering at least one variable rate under 5.75%, with more lenders likely to join this list over the next week.
“If you live in your home and have a good track record of paying off your mortgage, make that your benchmark. While a rate cut is great, ultimately, it’s the rate that you’re paying that matters, so make sure yours is working for you.”
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