Mozo Money Moves: A week of cuts, confusion and caution as the economy slows and banks hold back.

This week, 44 more lenders moved to pass on the Reserve Bank of Australia (RBA)’s latest 0.25% rate cut, with the average variable home loan rates one cut away from starting with 5 – but that doesn’t mean your repayments have dropped. From mortgage cuts that aren't flowing through to savings base rates being slashed, we break down what’s been happening behind the scenes this week in banking.

Plus, fresh economic data and RBA minutes shed light on what the central bank’s next move might be, we share why term deposits might be worth a second look, and reveal the telco plans offering the best bang for your buck in 2025.

Let’s get into it!

Mortgage rates continue to tumble, but are repayments reducing?

This week, another 44 lenders moved to pass on the most recent 0.25% cash rate cut, with all lenders reducing variable home loan rates by the full 25 basis points.

Big names like Westpac, ING, HSBC, Bendigo Bank and AMP Bank all lowered variable home loan rates, alongside a wide mix of customer-owned banks, challenger brands, and digital lenders. From Bank Australia to Bank of China, and from NRMA Insurance Home Loans to loans.com.au, the rate cuts are filtering through, and on the Mozo database its clearly reflected in average rates. 

Back in February, before the RBA’s first cut in four years, the average variable rate for an owner -occupier home loan with an LVR of 80% paying principal and interest was sitting at 6.71%. 

As of this week, that average has fallen to 6.23%, a full half a percentage point lower, and leading variable home loan rates are inching closer to 5.00%.

“Variable rates are finally shifting in a meaningful way, after two years of an extended RBA pause, and we’re seeing that reflected in both average and leading rates,” says Mozo’s personal finance expert Rachel Wastell. “If there are two more cuts this year we could even see variable home loan rates starting with four by Christmas.”

“However, before relying on future cuts it’s worth remembering that some lenders are still far behind the leaders, and if your rate starts with 6 you could give yourself a cut by shopping around.”

Leading Variable Rate Home Loans

Don’t ask, Don’t get: millions potentially miss out on relief

But even among lenders that have passed on the cut, borrowers shouldn’t assume they’re automatically paying less, as several major banks don’t reduce monthly direct debits unless the borrower requests it.

“It’s a clear case of ‘don’t ask, don’t get’,” says Wastell. “Most borrowers assume they will pay less when rates are cut, but unless you take action, your lender could leave your direct debit amount exactly where it is, even if your rate has fallen.”

According to APRA data, more than half (52%) of Australian owner-occupier home loans are stashed with CommBank (25%), NAB (14%) or ANZ (13%). Despite all Big Four banks passing on the 25 basis point cut to variable home loan rates, three of the four banks,  ANZ, NAB and CommBank, do not automatically lower monthly direct debits in line with the change. That leaves millions of households potentially missing out on immediate repayment relief.

“While leaving repayments higher can be a good strategy to get ahead on the mortgage, for those struggling with cost-of-living pressures, the missing cash could have an impact.”

“Yes, paying extra will reduce your loan faster, but that only works if you can afford it. For many Australians, that money is needed right now for groceries, fuel or rising energy bills, and they’re missing out because they simply don’t know they need to ask.”

Savings rates slide but some term deposits hold strong

On Monday, First Option Bank cut its rate on their high interest “Savings+Bonus” savings account by 0.25%, with the entire reduction coming off the base rate. While the maximum rate still holds up relatively well, sitting just 50 basis points below the market-leading 5.00% offers, if you don’t meet the account’s conditions, you’re looking at a measly 1.75%.

It’s still a better outcome than what you’d get if you don’t meet bonus conditions on other savings accounts, but for savers feeling the pinch or struggling to meet deposit conditions every month, should be keeping an eye on base rate cuts.

“In an environment where spending is slowing and growth is slumping, an unconditional savings account with a high base rate might be exactly the breathing room some savers need,” says Wastell. 

Leading unconditional (base rate) savings accounts

168 term deposit cuts in just six days

And it’s not just the base rates on savings accounts moving, there’s also been a landslide of term deposit changes in the first six days of June alone – 168 updates. That’s almost half the total we recorded for all of May and brings the number of term deposit rate changes in the first half of 2025 to 679.

“Hundreds of changes to term deposits highlights just how volatile this space has become as banks respond to shifting rate expectations,” says Wastell.

“While the broader trend is down, there are still some standout 1-year term deposit rates that are holding above 4%, though these are getting harder to find. A few competitive options remain, so if the cash rate does continue to go down, locking in a rate above 4% now could end up being a move that in the future you thank yourself for.”

Leading 1-year Term Deposit Rates

Economic data points to a slowdown, is fatigue setting in?

Three data drops from the Australian Bureau of Statistics (ABS) this week offered a clearer view of Australia’s economic trajectory, and it’s not looking too bright. The quarterly Labour Account data released today showed that in the March quarter, the number of filled jobs dropped for the first time since the COVID lockdowns of 2021, by 0.10%. The drop was largely driven by a fall in secondary jobs, suggesting that those relying on multiple sources of income may be starting to pull back. Meanwhile, job vacancies were also down, falling by 4%, while the proportion of jobs vacant slipped to its lowest level since early 2021. 

On Thursday, the ABS Monthly Household Spending Indicator showed just a 0.10% rise in April, following a small dip in March, as spending on services like dining, recreation and health inched up. Spending on goods, including clothing and new vehicles however – went backwards, reflecting that consumers are still spending, but more selectively. Then there’s the Gross Domestic Product (GDP) – that is, how much the Australian economy is growing. 

According to ABS National Accounts data released on Wednesday, the Australian economy is not growing by much, up just 0.2% in the March quarter. Reflective of weaker public investment, export disruptions related to weather events, and modest gains in household consumption, when looking at the GDP in per capita terms our economic output actually fell 0.2%. 

Across the board, figures for employment, household spending and GDP all point to a slowing economy, which is just enough to stir contention about what the Reserve Bank might do at their next meeting on 7-8 July.

“Individually, these figures might not seem alarming, but together they tell a story of economic fatigue,” said Wastell. “Growth is being propped up by population, not productivity, and households are navigating higher costs by doing less, not more. If this pattern continues, the RBA may have little choice but to cut the cash rate by one or two more times in the months ahead to stimulate economic activity.”

Caution ruled in May — will new data change the RBA’s course?

On Tuesday, the RBA released the minutes from its May cash rate meeting, offering a closer look into the central bank’s thinking around the most recent rate cut. Unsurprisingly, the decision to lower the cash rate to 3.85% was unanimous, but when you look closer at the language surrounding the cut, you can see the move was anything but hasty.

Easing inflation and softer consumption were cited as factors supporting a cut, but members also flagged lingering inflationary concerns, including a tight labour market, uncertainty in global trade and the risk that tariffs could drive up input costs (supply chain, energy, labour etc).

For borrowers hoping for a rapid cutting cycle, the minutes throw cold water on that idea. While market pricing has increasingly leaned towards the likelihood of two or even three more cuts this year — the RBA remains cautious. All four major banks are forecast at least two cuts this year, with NAB tipping three, but remember NAB did call for a 50 bps cut at the May meeting that did not eventuate, so three cuts may be another misstep.

The RBA’s caution is reflected in the fact “uncertainty” appears 17 times in the minutes, and one line in particular makes it clear the Board is actively avoiding the risk of overcorrecting.

“Members observed that it could be challenging for households and firms if the Board subsequently sought to reverse a loosening in policy that, in hindsight, proved to be too rapid.”

“The Board’s language suggests they’re keeping their options open and not leaning into a series of cuts,” says Wastell, “but if inflation continues to ease and the labour market weakens they may cut again.”

“When the May cash rate cut decision was made, the RBA was pouring cold water on the idea of back-to-back cuts, but what we’ve seen this week with falling filled jobs, subdued household spending, and slowing GDP, it could be exactly the kind of data that shifts that thinking ahead of the July meeting.”

Mozo reveals the Best Value Mobile Plans in 2025

This week Mozo experts crunched the numbers on 611 mobile plans from 48 providers to uncover the best value offers in Australia’s telco market, SpinTel took out the top gong as Australia’s Best Mobile Plan Provider for 2025, with six award wins across both 4G and 5G categories. 

After strong performances across the 5G Small, Large and Extra Large plan categories, Mozo experts also awarded Moose Mobile and Swoop as the Highly Commended Mobile Plan Providers for 2025. 

“The Mozo Experts Choice Award winners list can help consumers find the best value plans whether they choose to stream on long commutes, hotspot on the go, or manage multiple SIMs,”  says Mozo Data Director and Awards Judge, AJ Duncanson.

“To help Australian consumers stay connected for less, the 2025 winners list covers a wide range of user needs to include family bundles, international roaming, long-expiry options, and data-only plans.”

Check out the full list of winners here to see who made the cut or read the methodology report.

Mozo Rounds Up May Money Moves

This week Mozo’s research team also released the May Banking Roundup, reviewing the key changes that happened across key product categories in the Mozo database.

Home Loans: Most lenders passed on the full 25bps RBA rate cut to variable home loans, but a few went further or held some of the cut back. Fixed rates continue to trend down, and the best now start with a ‘4’.

Credit Cards: Only one provider had cut rates on their credit card offering. We’ve also seen a small handful of tweaks to introductory offers.

Personal Loans: While some banks have reduced rates, most of the post-RBA movement in personal loan rates has come from non-bank lenders.

Savings Accounts (At Call Deposits): Savings rates have taken a hit, with most banks cutting by 25bps, though some have made smaller or larger adjustments depending on the product.

Term Deposits: It was another big month for TD activity, with most banks in the Mozo database trimming rates across one or more terms. Interestingly, a few rate increases have emerged, particularly on longer terms.

To find out more about these changes, download the Mozo Banking Roundup for May 2025.

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As a part of Mozo’s commitment to making your money count for more, each month we “roundup” the rate changes, key banking trends and money moves in the Australian personal finance market. 

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