Media Release

Refinancing avalanche to follow historic rate cut

  • 11 lenders pass on rate cuts in 24 hours since cash rate falls to historic low of 1.75%
  • While most pass on full 0.25% cut, ANZ drops by 0.19%
  • 250% increase in borrowers researching break fee costs; 40% spike in customers looking to refinance
  • Experts forecast another rate cut to come in second half of 2016

4 May, 2016, Sydney, Australia – A surprise interest rate cut to a new historic low of 1.75% has borrowers scrambling to refinance their home loans, according to, one of Australia’s biggest comparison websites.

In the 24 hours since yesterday’s announcement, 11 lenders, including the Big 4, have come to the party by announcing they will pass on cuts to their home loan customers. Most are passing on the 0.25% in full, while ANZ has announced a 0.19% reduction.

Bessie Hassan, Money Expert at says: "While this outcome sounds promising, it represents just 15% of all home loan providers's database. Of the 74 providers on our database, there are 63 who are yet to make any announcement regarding passing on a cut to their home loan customers. What are they waiting for?”

Lenders who have announced cuts

Monthly (and yearly) savings for various loan sizes
BankChangeNew Rate$250k Loan$500k Loan$750k Loan$1M Loan
ANZ-0.19%5.37%$29.75 ($357)$59.50 ($714)$89.25 ($1071)$119.00 ($1428)
Bank of Queensland-0.25%5.61%$39.67 ($476)$79.35 ($952)$119.02 ($1428)$158.70 ($1904)
Bank of Melbourne-0.25%5.35%$39.16 ($470)$78.33 ($940)$117.49 ($1410)$156.65 ($1880)
bankSA-0.25%5.42%$39.30 ($472)$78.60 ($943)$117.91 ($1415)$157.21 ($1886)
CBA-0.25%5.35%$39.16 ($470)$78.33 ($940)$117.49 ($1410)$156.65 ($1880)
NAB-0.25%5.35%$39.16 ($470)$78.33 ($940)$117.49 ($1410)$156.65 ($1880)
Newcastle Permanent-0.25%5.05%$38.56 ($463)$77.12 ($925)$115.67 ($1388)$154.23 ($1851)
RAMS-0.25%5.30%$39.06 ($469)$78.13 ($938)$117.19 ($1406)$156.25 ($1875)
St George-0.25%5.44%$39.34 ($472)$78.68 ($944)$118.02 ($1416)$157.37 ($1888)
Westpac-0.25%5.43%$39.32 ($472)$78.64 ($944)$117.97 ($1416)$157.29 ($1887)
Ubank-0.25%4.17%$36.69 ($440)$73.38 ($881)$110.06 ($1321)$146.75 ($1761)
Average-0.25%4.87%$38.19 ($458)$76.37 ($916)$114.56 ($1375)$152.75 ($1833)

State by state

Monthly (and yearly) savings across the states, based on average loan sizes
BankNational $357kNSW $416kVIC $367.9kQLD $305.4kSA
WA $331.8kTAS $227.9kNT
ACT $346.6k
ANZ$42.51 ($510)$49.54 ($594)$43.78 ($525)$36.34 ($436)$33.06 ($397)$39.48 ($474)$27.12 ($325)$36.95 ($443)$41.24 ($495)
Bank of Queensland$56.69 ($680)$66.07 ($793)$58.38 ($701)$48.47 ($582)$44.09 ($529)$52.66 ($632)$36.17 ($434)$49.28 ($591)$55.00 ($660)
Bank of Melbourne$55.96 ($671)$65.21 ($783)$57.63 ($692)$47.84 ($574)$43.52 ($522)$51.98 ($624)$35.70 ($428)$48.64 ($584)$54.30 ($652)
bankSA$56.15 ($674)$65.45 ($785)$57.84 ($694)$48.01 ($576)$43.67 ($524)$52.16 ($626)$35.83 ($430)$48.81 ($586)$54.49 ($654)
CBA$55.96 ($671)$65.21 ($783)$57.63 ($692)$47.84 ($574)$43.52 ($522)$51.98 ($624)$35.70 ($428)$48.64 ($584)$54.30 ($652)
NAB$55.96 ($671)$65.21 ($783)$57.63 ($692)$47.84 ($574)$43.52 ($522)$51.98 ($624)$35.70 ($428)$48.64 ($584)$54.30 ($652)
Newcastle Permanent$55.09 ($661)$64.21 ($770)$56.74 ($681)$47.10 ($565)$42.85 ($514)$51.17 ($614)$35.15 ($422)$47.89 ($575)$53.46 ($641)
RAMS$55.81 ($670)$65.05 ($781)$57.49 ($690)$47.72 ($573)$43.41 ($521)$51.85 ($622)$35.61 ($427)$48.52 ($582)$54.16 ($650)
St George$56.21 ($675)$65.51 ($786)$57.90 ($695)$48.06 ($577)$43.72 ($525)$52.21 ($627)$35.86 ($430)$48.86 ($586)$54.54 ($655)
Westpac$56.18 ($674)$65.48 ($786)$57.87 ($694)$48.04 ($576)$43.69 ($524)$52.19 ($626)$35.85 ($430)$48.84 ($586)$54.52 ($654)
Ubank$52.42 ($629)$61.09 ($733)$53.99 ($648)$44.82 ($538)$40.77 ($489)$48.69 ($584)$33.44 ($401)$45.57 ($547)$50.86 ($610)
Average$54.56 ($655)$63.59 ($763)$56.20 ($674)$46.65 ($560)$42.43 ($509)$50.68 ($608)$34.81 ($418)$47.43 ($569)$52.94 ($635)

With more lender announcements due in coming days, the home loan market is on high alert for a rush of mortgage customers looking to refinance or fix their loans.

In a sign borrowers will be enticed to get a better deal, there has already been a 40% increase in the number of customers looking to refinance on following yesterday’s announcement.

The page on the website dedicated to fixed rate break costs has seen a whopping 250% spike in traffic.

Ms Hassan says while the rate cut is mostly good news for borrowers, now is the time to see what else is out there.

“Now that home loan customers have had time to digest the record-low level they are starting to look at what interest rate they are paying and may be questioning why they’re paying so much,” she says.

“Particularly for those whose lenders are yet to announce a cut, or pass it on in full, customers will want to explore their refinancing options.

"While a rate cut that mirrors the RBA's cut of 0.25 % is of course welcome news, it's important to focus less on the rate your lender has cut by and more on the overall rate on offer.

“If you're not satisfied, a better rate is worth pursuing – a small change to your interest rate can save you thousands of dollars in the long run. And of course if your lender hasn't yet announced a cut, get in touch and demand a discount.

“With so much choice in today's market, now is an exciting time for borrowers and they shouldn't be taken advantage of by lenders who are taking their time passing on rate cuts.”

Ms Hassan says customers will need to wait at least nine days for banks to pass the rate drop on. ANZ’s rate drop is the first to come into effect on Friday 15 May 2016.

“Home owners could be pocketing almost $55 a month extra on the average mortgage, but there's a big difference between when these interest rates will be effective, so check with your lender on when they will be passing on its rate cut before making the switch.

“Variable rates will be the first to come down, so homeowners have a bit of breathing room before they have to rush into fixing interest rates.”

Also keep in mind that there may be another rate cut to come, says Ms Hassan.

“The unexpected decision to drop rates to 1.75% has opened the gates for one more rate cut.

“In the past five years a rate cut has nearly always followed up with another cut within a few months,” she says.

“The general consensus among experts is that the RBA will ease interest rates another 25 basis points, to 1.5% following the release of Consumer Price Index data in August.”

According to the May Reserve Bank Survey there were 12 predictions of a fall in 2016, with the most popular months indicated for a cut being August (4 predictions) and November (3).


For further information


The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on's review pages for the current correct values.

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