Big banks quick to drop home loan rates, but 3 fail to pass on full RBA cut

Tom Watson

03 Jul 2019

Big banks drop rates july 2019 content

All four major Australian banks - ANZ, Commonwealth Bank, NAB and Westpac - have made cuts to their respective variable rate home loans following the Reserve Bank Board’s interest rate decision yesterday afternoon.

In a largely anticipated move, the RBA lowered the official cash rate by 25 basis points from 1.25% to 1.00% - an historically low level in Australia. 

And the big banks weren’t slow to hang around, with ANZ announcing its decision to pass on the full 25 basis point cut to owner occupier and investor customers just hours after the RBA’s decision.       

ANZ was widely criticised for failing to pass on the full rate cut to its customers after the June RBA rate cut, but it proved to be the only major bank to do so this time round, with it’s Standard Variable Rate for owner occupiers to drop from 5.18% p.a. (5.28% p.a. comparison rate*) to 4.93% p.a. (5.03% p.a. comparison rate*) as of July 12. 

“Today we have decided we will reduce variable interest rates for our home loan customers by 0.25% p.a. Importantly, we will apply this reduction across all our variable rate home loans,” said ANZ Group Executive, Australia Retail & Commercial, Mark Hand in a statement yesterday. 

“On balance, we believe this is the right decision for our home loan customers and for our business.” 

The Commonwealth Bank was also quick to jump on the rate cut bandwagon, but their customers might be less impressed as the bank failed to pass on the full 25 basis point cut across all of their variable rate offers. 

Instead, the bank will reduce their Standard Variable Rate home loan for owner occupiers by 0.19% from 5.12% p.a. (5.27% p.a. comparison rate*) to 4.93% p.a. (5.08% p.a. comparison rate*) as of July 23.


NAB also announced a 0.19% cut to its owner occupier and investor variable rate home loans, with it’s Tailored Home Loan for owner occupiers set to drop from 5.11% p.a. (5.24% p.a. comparison rate*) to 4.92% p.a. (5.05% p.a. comparison rate*) from July 12.   

Last of the big four to make a move last night was Westpac, with the bank announcing a 0.20% cut on variable home loan rates for owner occupiers meaning that its Rocket Repay Home Loan will drop from 5.18% p.a. (5.32% p.a. comparison rate*) to 4.98% p.a. (5.12% p.a. comparison rate*) from July 16.  

The decision from Westpac means that it was the only major bank not to pass on a full 25 basis point cut to its customers following either the RBA’s June or July interest rate drops. 

Failure to pass on full cut nets big banks billions 

So how much do the big banks pocket by failing to pass on the RBA’s full 25 point cuts? 

According to Mozo research, since 2016 the four major banks have made an astonishing $125 million per month (approximately) in additional revenue or $3.86 billion in total by failing to pass cuts on in full. 

Furthermore, the delay on actually passing on the cuts to their customers has netted the banks an additional $221 million since August 2016. 

“When you consider that last month ANZ and Westpac pocketed a $193 million annual windfall by holding back some of the official rate cut, it’s not surprising that three of the major banks found it too hard of an opportunity to pass up yesterday,” said Mozo Director, Kirsty Lamont.

RELATED: The best home loans in Australia for 2019

Several lenders, including Athena and Homestar have already moved to pass on the full 25 basis point cut to their customers following yesterday’s RBA decision, and if the response to the RBA’s June decision is anything to go by, there will be more to come in the coming days. 

Following the June RBA cut, Mozo recorded that 47 home loan lenders passed on the full 25 basis point rate cut, 32 passed on part of the cut while seven are yet to move significantly. 

Ready to take advantage of the latest rate cut to switch to a better offer? Start your search by checking out some of the hot offers in the table below, or compare even more great deals by heading over to the Mozo home loan comparison hub.

Compare home loans 2019

Rates updated daily. Advertiser disclosure.

  • loans.com.au
    Mozo Expert Choice Badge" style="width:60px;">

    1.85% p.a.variable for 24 months and then 2.25% p.a.

    2.21% p.a.

    $1234

    Product details Close details
    Smart Booster Home Loan

    2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    1.85% p.a.variable for 24 months and then 2.25% p.a.

    2.21% p.a.

    New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.

    Smart Booster Home Loan

    New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.

    • 1.85% p.a.variable for 24 months and then 2.25% p.a.

    • 2.21% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • Optional - with 0.10% additional interest

    • 80.00%

    • $520

    • $50,000

    • $1,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Smart Booster Home Loan

    Details Close

  • Macquarie

    2.29% p.a.

    2.29% p.a.

    $1234

    Product details Close details
    Basic Home Loan

    Owner Occupier, LVR<60%, Principal & Interest

    2.29% p.a.

    2.29% p.a.

    Competitive low variable rate. No application or account management fees. Flexibility to split your loan and set different repayment types. Fee free withdrawals of your savings.

    Basic Home Loan

    Competitive low variable rate. No application or account management fees. Flexibility to split your loan and set different repayment types. Fee free withdrawals of your savings.

    • 2.29% p.a.

    • 2.29% p.a.

    • $0

    • $0.00

    • $400.00

    • yes - free

    • yes - free

    • no

    • 60.00%

    • $0

    • $150,000

    • $5,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Monthly

    Read our Mozo Review to learn more about the Basic Home Loan

    Details Close

  • Athena
    Mozo Expert Choice Badge" style="width:60px;">

    1.99% p.a.

    1.99% p.a.

    $1234

    Product details Close details
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    1.99% p.a.

    1.99% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.

    Celebrate Variable Home Loan

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.

    • 1.99% p.a.

    • 1.99% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 60.00%

    • $0

    • $100,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Celebrate Variable Home Loan

    Details Close

  • 86 400

    2.19% p.a.

    2.20% p.a.

    $1234

    Product details Close details
    Neat Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

    2.19% p.a.

    2.20% p.a.

    Competitive variable rate. Borrowers choose their repayment schedule (weekly, fortnightly or monthly) Make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

    Neat Home Loan

    Competitive variable rate. Borrowers choose their repayment schedule (weekly, fortnightly or monthly) Make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

    • 2.19% p.a.

    • 2.20% p.a.

    • $250

    • $0.00

    • $300.00

    • yes - free

    • yes - free

    • no

    • 60.00%

    • $250

    • $80,000

    • $5,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Neat Home Loan

    Details Close

^See information about the Mozo Experts Choice Home loans Awards