Which banks are passing on the RBA rate cut?
Will you save on your home loan? We've rounded up every bank that has announced changes.
Will you save on your home loan? We've rounded up every bank that has announced changes.LATEST: Which banks are passing on the August 2016 RBA interest rate cut?
The RBA cut against experts’ expectations today when it trimmed the official cash rate to 1.75%. The move brings Australia’s official cash rate to a record low.
Within moments of the announcement, NAB announced it would reduce its variable rate for home loans by 0.25%, becoming the first bank to pass on the cut. Bank of Queensland, Westpac, Commonwealth Bank and ANZ have since followed suit. We've rounded up the changes in the table at the end of this post.
We'll be updating this list as additional banks get on board, so keep checking back. Meanwhile, learn about how much money the banks make by not immediately introducing the cuts.
The cut brought NAB’s new standard variable rate from 5.60% to 5.35%, and will be effective from 16 May. NAB group executive of personal banking Gavin Slater said the bank took more into account in its decision than the surprise move by the RBA.
“The circumstances of each decision will always vary and we must take into account factors such as competition, regulatory capital requirements and funding costs. Today’s decision balances the needs of our home loan customers with our shareholders,” Slater said.
Bank of Queensland followed soon after, announcing it would also cut interest rates by 0.25% from 18 May. The move comes less than a month after the bank raised rates by 0.12% for owner-occupiers and 0.25% for investors.
Commonwealth Bank confirmed in a tweet that it would be cutting its standard variable home late rate by 0.25%, dropping it to 5.35% from 20 May. Westpac is cutting its rates by 0.25%, dropping its variable rate for owner occupiers to 5.43% (comparison rate 5.75%) from 23 May.
ANZ also confirmed via a tweet that it is cutting its rate, but only by 0.19%, not the full 0.25%. Its standard variable rate is now 5.37%. The change at ANZ takes effect 13 May, which is the earliest cut we've seen so far.
In announcing its decision to cut rates, the Reserve Bank board cited recent sluggish inflation figures.
“Inflation has been quite low for some time and recent data were unexpectedly low. While the quarterly data contain some temporary factors, these results, together with ongoing very subdued growth in labour costs and very low cost pressures elsewhere in the world, point to a lower outlook for inflation than previously forecast,” RBA governor Glenn Stevens said.
Stevens said lower lending rates as a result of the cut were unlikely to spark unsustainable housing growth.
“In reaching today's decision, the Board took careful note of developments in the housing market, where indications are that the effects of supervisory measures are strengthening lending standards and that price pressures have tended to abate. At present, the potential risks of lower interest rates in this area are less than they were a year ago.”
| Lender (Announced changes) | Rate cut | Effective date | Days after announcement |
|---|---|---|---|
| Adelaide Bank | -0.17% | 30 May 2016# | 27 |
| AMP | -0.20% | 23 May 2016# | 20 |
| ANZ | -0.19% | 13 May 2016 | 10 |
| Aussie Home Loans | -0.19%* | 25 May 2016 | 22 |
| Australian Military Bank | -0.25% | 27 June 2016# | 24 |
| AusWide Bank | -0.20% | 25 May 2016 | 22 |
| B & E Personal Banking | -0.20% | 17 May 2016 | 14 |
| Bank Australia | -0.10% | 13 May 2016 | 10 |
| Bank of Melbourne | -0.25% | 23 May 2016 | 20 |
| Bank of Queensland | -0.25% | 18 May 2016 | 15 |
| Bank of Sydney | -0.27% | 27 May 2016 | 24 |
| bankSA | -0.25% | 23 May 2016 | 20 |
| BankVic | -0.25% | 16 May 2015 | 13 |
| Bankwest | -0.20% | 20 May 2016 | 17 |
| Beyond Bank | -0.10% | 20 May 2016 | 17 |
| Bendigo Bank | -0.20% | 30 May 2016# | 27 |
| Big Sky | -0.25% | 31 May 2016# | 28 |
| Citi | -0.21% | 23 May 2016 | 20 |
| Commonwealth Bank | -0.25% | 20 May 2016 | 17 |
| Credit Union SA | -0/10% | 17 May 2016 | 14 |
| CUA | -0.25% | 19 May 2016 | 16 |
| First Option CU | -0.25% | 9 May 2016 | 6 |
| Firstmac | -0.25% | 23 May 2016# | 20 |
| G&C Mutual | -0.12% | 6 May 2016 | 3 |
| Greater Bank | -0.25% | 16 May 2016# | 13 |
| Heritage Bank | -0.20% | 23 May 2016 | 20 |
| Homestar Finance | -0.25% | 5 May 2016 | 2 |
| Horizon Credit Union | -0.20% | 1 June 2016# | 29 |
| HSBC | -0.25% | 23 May 2016# | 20 |
| Hume Bank | -0.15% | 25 May 2016 | 22 |
| Hunter United Credit Union | -0.25% | 1 June 2016# | 29 |
| IMB | -0.20% | 25 May 2016 | 22 |
| ING DIRECT | -0.25% | 20 May 2016 | 17 |
| loans.com.au | -0.25% | 23 May 2016 | 20 |
| ME Bank | -0.05% | 16 May 2015 | 13 |
| Mortgage House | -0.25% | 6 May 2016 | 3 |
| MyState Financial | -0.23% | 17 May 2016 | 14 |
| NAB | -0.25% | 16 May 2016 | 13 |
| Newcastle Permanent Building Society | -0.25% | 19 May 2016 | 16 |
| People's Choice Credit Union | -0.21% | 17 May 2016 | 14 |
| Pepper | -0.25%*** | 23 May 2016 | 20 |
| QLD Police Credit Union | -0.25% | 23 May 2016 | 20 |
| Qudos Bank (formerly Qantas Credit Union) | -0.25% | 19 May 2016 | 16 |
| Queenslanders Credit Union | -0.15% | 24 May 2016# | 21 |
| RAMS | -0.25% | 23 May 2016 | 20 |
| SCU | -0.20% | 17 May 2016 | 14 |
| St.George Bank | -0.25% | 23 May 2016 | 20 |
| State Custodians | -0.25%** | 30 May 2016 | 27 |
| Suncorp | -0.20% | 25 May 2016 | 22 |
| Teacher's Mutual Bank | -0.25% | 12 May 2016 | 9 |
| The Mutual | -0.25% | 6 June 2016 | 34 |
| The Rock Building Society | -0.23% | 17 May 2016 | 14 |
| UBank | -0.25% | 16 May 2016 | 13 |
| Westpac | -0.25% | 23 May 2016 | 20 |
| Yellow Brick Road | -0.25% | 25 May 2016# | 22 |
| Your Credit Union | -0.25% | 1 June 2016 | 29 |
The above effective dates are for rates relating to new borrowers only unless otherwise indicated.
#These effective dates are applicable for new and existing customers as per the lenders announcement.
*Aussie Home Loans is dropping its Aussie Select Variable Home Loan by 0.19%, while its Optimiser Principal and Interest Variable rates will be cut by 0.25% for owner occupiers and 0.20% for investors.
** For variable investment loans, State Custodians will only be passing on its full rate cut to loans settled after 1 March 2016.
*** This are for new customers. Rates for existing customers remain unchanged.
Looks like Mac Bank have done the same to me, not passed on a basis point of the RBA cut. Outrageous after they stated they would pass on 0.20% on 9th May. Neither have they contact me with any explanation. Time to stop this gouging behaviour!
I called Macquarie Bank today to find out why the interest rates on my home loans had not been reduced in line with what they had promised their customers (0.20% for Investment – 0.25% for Owner Occupied). I was put through to the Pricing team who said that they had an algorithm for working out who would get the cut and who would miss out.
I missed out….no missed repayments ever….they didn’t pass on any of the cut on and I am furious. I’m already on to my broker about refinancing.
Do you know if Liberty Finance will pass on the cut?
Received letter from liberty just now and good news they pass .19%.
Hi Dom,
thanks for the question.
Unfortunately they haven’t announced any changes yet, but I’m currently monitoring them and will update this table as soon as we hear from them regarding a change.
Thanks for stopping by!
Marc.
So how Institutions have not pass on any rate reduction yet?
Hi Mel,
Thank you for reaching out to finder.com.au, there are about a handful of lenders that we have not seen official announcements regarding reducing rates however as multiple lenders have just chosen to update their interest rates rather than making an announcement this may also be the case for the lenders we have not heard from.
Regards
Jodie
Thanks for providing this list – glad someone is keeping an eye on the banks and letting people know which banks are responsive to RBA interest rate reductions, and which banks are trying to sneak under the radar and not get noticed. Previously you showed ALL banks in the list, including those which have not yet announced their decision (which you indicated with “TBA”). Now it appears you are only showing the banks which have made a decision. Can you bring back the full list? I think it is useful because it gives your readers an idea about what *proportion* of banks have responded. I’m still waiting for my bank – State Custodians – to advise how they will respond (all I get is a robotic response that they haven’t decided and don’t know when they will decide). I’m keen to know whether they are just one of a few banks left, or whether there are still a lot of banks out there who are hoping people will forget about the rate drop earlier this month. It’s almost 3 weeks now since the RBA’s decision – surely that’s enough time to announce a response, you’d think…
Hi Peter,
Thank you for contacting finder.com.au and for your feedback on our tables. We always appreciate hearing from our readers and what they think of how we present the information we have.
In terms of the second table, we have removed this as it was duplicating a lot more than when we first published as all the major lenders have made their announcements and the lenders that are still left to announce are the more regional or smaller lenders. There has also been a few lenders that have not made any announcement but have chosen to simply update the interest rates on their website, which makes tracking the announcements for these a bit more difficult.
With regards to State Custodians they responded to a customer query on the 21 May on State Custodians Facebook page mentioning that they would be passing on the rate cut in full effective 30 May 2016.
Regards
Jodie
From the Facebook page you linked, it looks like State Custodians will only reduce rates for owner occupied loans and NEW investor loans (after 1 March 2016), which is very disappointing for their existing investor home loan customers as shown in comments on their Facebook page. Perhaps you can update your table with this information, similar to how you’ve noted the rate cuts for Aussie Home Loans which vary depending on the product.
Hi Peter,
thanks for the suggestion!
I’ve made a note of this under the table.
Thanks,
Marc.