Which home loan lenders have already passed on the March RBA cut?

By Tom Watson ·

Last updated: 2:15pm, Friday March 6. 

For the most recent moves following the RBA's March 20 Emergency cut, please check out our new article

For a fourth time in the past year the Reserve Bank of Australia has cut interest rates, dropping the official cash rate from 0.75% to a record low 0.50% at its March board meeting this afternoon.

The result? Banks and other lenders are already taking the axe to home loan interest rates

As of Friday morning (March 6th) 35 lenders in the Mozo database have already announced their respective responses to the RBA move, with the surprising news being that the vast majority (32 lenders) have decided to pass on the full 25 basis point cut to at least some of their owner occupier home loan customers. 

Online lenders quick off the mark       

As was the pattern following Reserve Bank announcements in 2019, online lenders were some of the first home loan lenders to announce rate reductions following yesterday's announcement.  

Within minutes of the RBA decision coming out, online lenders Athena Home Loans and Homestar were joined by neobank 86 400 in announcing that they would be passing on the full 0.25% cut on to customers.

The reductions mean that the Athena Variable Home Loan rate has dropped to 2.59% (2.55% comparison rate*), the Homestar Star Essentials Home Loan to 2.49% (2.52% comparison rate*) and the 86 400 Own Home Loan to 2.84% (3.12% comparison rate*). 

According to Mozo Banking Expert, Peter Marshall, while every lender is unlikely to pass on the full cut, there's set to be a lot of movement towards the lower end of the market as lenders vie for pole position.

“As we’ve already seen from the likes of Athena and Homestar, there’s some healthy competition at the sharper end of the market, so there are likely to be at least a handful of other lenders that join them in passing on today's cut in full.”

RELATED: Homestar shows no sign of slowing down, passes on full 0.25% cut

Fellow online lenders loans.com.au, Freedomlend and Reduce Home Loans also joined in on the action in the hours following the RBA cut, with all three announcing 25 basis point reductions for eligible home loan customers. 

The rate cuts from Freedomlend and Reduce Home Loans have already come into effect, while existing home loan customers with loans.com.au will need to wait until March 26 for the cut to apply. 

Big banks surprise with full cut 

In a move that took many pundits by surprise move, all four major banks - ANZ, Commonwealth Bank, NAB and Westpac - also passed the Reserve Bank's 25 basis point cut on in full to eligible standard variable rate home loan customers.   

The Commonwealth Bank and Westpac were the first of the major banks to post their changes, with CommBank set to pass on its 0.25% cut on March 24th while Westpac will do the same on March 17th.   

In a statement released late on Tuesday afternoon, Westpac Chief Executive, David Lindberg, said that the bank was aiming to support business and mortgage customers during an 'unprecedented' time for the Australian economy. However, he failed to rule out future rate adjustments.

“While this is the right decision, pricing changes are increasingly challenging as the cash rate heads towards zero. We will continue to review our rates on a case-by-case basis taking into account the diverse range of stakeholders and factors which influence the cost of funding.”

RELATED: How have ANZ, CommBank, NAB and Westpac responded to the March RBA rate cut?

Fellow members of the 'Big Four', NAB and ANZ, also made announcements in the hours following the RBA decision. 

NAB will be passing on the full 25 basis point cut to variable rate home loan customers from March 13th, while ANZ will implement its own 0.25% rate cut on the same day.  

Why are lenders usually slow to pass on the cut? 

So when can we expect to find out how other lenders will react to the Reserve Bank’s latest move? 

While the majority of lenders tend to make their intentions clear within the first few days or week after the RBA announcement, the time it takes to pass that change on to home loan customers is a different matter.   

Following the October RBA rate decision, Mozo tracked responses from over 80 banks and lenders in the Mozo database and found that it took them 18 days on average to pass on the rate cut. That’s the difference between the date of the RBA announcement and the effective date of the lender's cut. 

One motivation behind this slow reaction could be cost.   

A recent Mozo analysis found that by delaying the effective date of their respective interest rate reductions after RBA cuts, the major banks (ANZ, Commonwealth Bank, NAB and Westpac) have made over $1 billion in additional revenue since 2011.

Which banks have passed on a full or partial home loan rate cut? 

As other banks and lenders join the likes of 86 400, Athena, Commonwealth Bank, Homestar and Westpac in making rate cut announcements of their own, we’ll be updating the tables below. 

That way you'll be able to see the lenders who have passed today’s rate cut on in full (-0.25%), as well as how the March cuts compare to those made after the October RBA announcement.

Full 0.25% cut 

March 2020October 2019
86 400-0.25%N/A
AMP-0.25%-0.15%
Athena-0.25%-0.25%
ANZ-0.25%-0.14%
Bankwest-0.25%-0.13%
BankSA-0.25%-0.15%
Bank Australia-0.25%-0.10%
Bank of Melbourne-0.25%-0.15%
Bendigo Bank-0.25%-0.15%
Citi-0.25%-0.15%
CommBank-0.25%-0.13%
CUA-0.25%-0.13%
Freedom Lend-0.25%-0.25%
Greater Bank-0.25%-0.14%
Homestar-0.25%-0.25%
HSBC-0.25%-0.15%
IMB Bank-0.25%-0.13%
ING-0.25%-0.15%
loans.com.au-0.25%-0.15%
Macquarie-0.25%-0.15%
ME-0.25%-0.15%
MyState Bank-0.25%-0.15%
NAB-0.25%-0.15%
Newcastle Permanent-0.25%-0.13%
Reduce Home Loans-0.25%-0.20%
Suncorp-0.25%-0.15%
St.George-0.25%-0.15%
Tic:Toc-0.25%-0.15%
UBank-0.25%-0.25%
Westpac-0.25%-0.15%

Other cuts

March 2020October 2019
Beyond BankTBD-0.14%
BOQ-0.17%-0.10%
Heritage Bank-0.20%-0.15%
RACQ Bank-0.17%-0.15%
Virgin Money-0.17%-0.15%

Not happy with the cut your own lender has passed on? Start your search for a better deal by checking out some of the hot home loan deals in the table below, or compare your current rate to even more offers by heading to Mozo’s dedicated home loan comparison table. 

Compare home loans - page last updated October 17, 2020

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Tom Watson
Tom Watson
Finance journalist

Tom Watson is a financial journalist at Mozo, specialising in fintech, property and business banking. Whether it’s reporting on banking trends or uncovering the latest product innovations, Tom’s mission is to keep our readers up to date with breaking Australian financial news. His work is often sourced in the media and across social media channels. Tom has a degree in Journalism from the University of Technology, Sydney.