Big four bank customers miss out on hundreds annually over RBA rate cut gap

By Roisin Kelly-Goldsmith · · 3 min read
Fact Checked
Advertiser disclosure

Big four bank customers with variable rate home loans are set to lose hundreds of dollars annually after their lenders failed to pass on the full rate cut suggested by the RBA yesterday.

Mozo crunched the numbers and found that a customer with a $300k home loan* from ANZ is set to pay $20 less in interest on monthly repayments thanks to the partial rate cut.

However, if ANZ had sliced interest rates on par with the Reserve Bank’s move of 25 basis points, mortgage customers would have been better off by $42 each month. It doesn’t seem like much, but over a year this would equate to a $504 saving in comparison to $240.

As Mozo Director Kirsty Lamont explained, slight rate drops may not be enough for major banks to retain customer loyalty.

“Home loan customers are unlikely to be sympathetic towards the big banks which have failed to pass on cuts in full, hiked rates out of cycle and delayed passing on rate relief to home loan customers,” she said.

CommBank was the first major bank to reduce its SRV mortgages by 0.13% yesterday, a modest move in comparison to the Reserve Bank’s record breaking cash rate cut of 0.25% to 1.50%.


NAB followed suit two hours later but by a smaller margin at 0.10% on its variable rate home loan products, followed by ANZ and Westpac who slashed rates by 0.12% and 0.14% respectively.

The big four bank partial rate cuts will take up to 20 days to kick in for home loan customers. According to Mozo data, before that time they will collectively profit in additional interest by more than $132 million each day.

So far Bank Australia has been the only lender to pass on the rate cut in full.


But even those customers advantaged by a rate cut on par with the Reserve Bank’s may be tempted to switch their home loan over to one offered by a non-bank.

“The good news for home borrowers is that non-banks are not subject to the heightened regulations that are increasing cost of funding pressures for the big banks, so they may bring out rock bottom rates to entice customers,” said Lamont.

How to refinance a home loan:

  • Compare. We have the numbers in tables all sorted for you. Visit Mozo’s home loan hub and scroll through to get a feel for the refinancing market.
  • Calculate. This is where our home loan switch and save calculator can come in handy. Type in key details like your home value, loan interest rate and term, then hit “get results” to see how much you could save by switching.
  • Click. Once you’re ready to refinance, select your choice by clicking through a “go to site” icon which will direct you to the lender’s site. Apply from there to complete the process. It’s that easy!

Has your lender been naughty or nice this rate cut season?  Find out via our live updates page.

* On a package rate, owner occupier home loan with principal and interest repayments and loan to value ratio of 80%.