Has your home loan provider passed on the August RBA rate cut?

Tuesday 02 August 2016

Article by Rebeccah Elley

For homeowners across the country things are about to get exciting, after the Reserve Bank slashed the official cash rate to a record low 1.50%, at its August board meeting.

Outgoing RBA Governor, Glenn Stevens explained, "low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector."

"These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this."

Now it’s just a waiting game to see whether lenders follow suit and pass on this 25 basis point reduction to home loan customers.

Australia's largest bank, CommBank was quick to announce on Twitter that it will only be passing on 0.13% to its standard variable rate mortgages, bringing the owner occupier rate to 5.22% from 19 August. 

“While the circumstances of each RBA rate decision will always vary, we’ve carefully considered the current environment and the needs of both borrowers and savers,” said Matt Comyn, Group Executive at CommBank in a statement.

Following closely behind, big bank competitor NAB also announced it will be dropping rates, but like CommBank it will fail to pass on the full 25 basis points, instead opting for a 0.10% rate cut bringing its standard variable interest rate to 5.25% from 19 August.

<<UPDATE>> ANZ has announced it will be cutting its variable rate by 12 basis points from 12 August - bringing its owner occupier rate to 5.25%. And Westpac will cut by 14 basis points to 5.29% starting 23 August. St. George, which is owned by the Westpac Group will also see the same 0.14% rate drop. 

The first announcement from a smaller home loan provider came from Bank Australia, with good news for borrowers, slashing its variable rate loans by the full 0.25%, bringing it to 4.74% from 5 August. 

Other lenders to have passed on some or all of the RBA's 25 basis point rate cut include: 

  • AMP: Down by 10 basis points, AMP's new standard variable rate from 19 August will sit at 5.43%.
  • Bank of Melbourne: From 23 August, its standard variable rate home loan for owner occupiers will be slashed by 0.13% to 5.22%. 
  • Bank of Queensland: For owner occupier borrowers the Bank of Queensland will apply a 0.15% reduction (0.10% for investors). So the new rate for BOQ’s Clear Path home loan will be 4.32%.
  • Bank of Sydney: This smaller provider will drop its rates by the full 0.25% to 5.59% (date is yet to be confirmed). 
  • BankSA: While only a 0.13% rate reduction will be applied to BankSA's standard variable rate (bringing it down to 5.29%) the rate drop will kick in early from 5 August. 
  • Bankwest: CommBank owned lender Bankwest will only be passing on 0.10% from 23 August, which will see its standard variable rate for owner occupiers slide to 5.35%. 
  • Bendigo Bank: 0.10% will be applied to Bendigo Bank's variable rate from 29 August. The new standard variable rate will be 5.38%. 
  • Citibank: 15 basis points will be wiped from Citibank's variable rate loans, placing the new standard variable rate at 5.58%. Customers will have to wait until 23 August for the rate reduction to take effect. 
  • CUA: Customers of CUA will receive a 0.12% rate reduction, making the owner occupier rate 4.69% from 18 August. 
  • Greater Bank: Variable home loan rates will be shaved by 10 basis points, making the standard variable home loan rate 4.65%. The rate cut will be applied to new loans from 8 August and to existing loans from 15 August.
  • G&C Mutual Bank: While this lender will also only be passing on 0.10% (new SVR: 5.15%), it will be applied early from 5 August. 
  • Homestar: Online lender Homestar has joined the few lenders passing on the full 0.25% rate cut. From 4 August, its new standard variable rate will be just 3.48%.
  • IMB Bank: Sticking to the trend, IMB Bank has followed other lenders also applying a rate reduction of 0.10%, which will kick in from 24 August and see its owner occupier rate drop to 4.99%. 
  • iMortgage: While 10 basis points might not seem like much, with iMortgage the new SVR will be a low 4.05% - taking effect 9 Aug. 
  • ING Direct: From 15 August, ING's Orange Advantage variable rates will come down by 0.12%, making its new standard variable rate 4.55%.
  • Macquarie: This home loan lender's standard variable rate will fall by 0.15% to 4.09%, kicking in from 8 Aug.
  • ME Bank: Customers of ME Bank will receive a 0.10% discount after 23 August. This will move the rate attached to its Flexible Home Loan to 4.93%. 
  • My Credit Union: This mutual provider will apply a 10 basis point rate cut, which will take place from 9 August and make its SVR 4.54%. 
  • Newcastle Permanent: 10 basis points seems to be the popular number, as Newcastle Permanent has also announced this will be applied to its variable rates from 19 August (New SVR: 4.95%).
  • People's Choice Credit Union: Swiping 13 basis points off its SVR, customers after 19 Aug will be charged 5.21%.
  • P&N Bank: After 26 August, this member owned bank will cut its variable rate to 5.14%, by the full 25 basis points. 
  • RAMS: Borrowers with RAMS will be receiving a 0.10% rate reduction from 23 August. This will see its owner occupier rate fall to 5.20% from 23 August. 
  • Suncorp: Another lender to only pass on a 10 basis point reduction is Suncorp, slashing its variable rate to 5.40% from 24 August. 
  • UBank: 3.97% will be the new SVR UBank customers receive, after the 0.10% rate reduction is applied (from 19 August). 
  • Virgin Money: Dropping its rates by the full 0.25%, Virgin Money's standard variable home loan will now be just 4.54% from 8 August. 

Here at Mozo, we'll be updating this page as providers announce their rate reductions or for more info on the RBA rate cut, head to our dedicated Reserve Bank page

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