Mozo Money Moves: RBA holds, fixed rates fall and a decade of debt reveals 4,400 reasons to switch

It’s been a big week in banking, with markets shocked by the central bank’s hold and new data revealing just how much more a mortgage costs in 2025 compared to 2015.
Lenders were also quietly shifting fixed rates, as while the official cash rate stayed put, banks are already making moves that tell us about where things are headed next.
RBA holds steady, but borrowers shouldn’t
This week started off with almost near certainty that the Reserve Bank of Australia was going to cut the cash rate to 3.60%. According to the ASX RBA Rate Tracker, markets had priced in a 100% chance of a cut in the week leading up to the decision, big bank economists were aligned and lenders had already begun adjusting their expectations with fixed rate cuts.
But despite expectations, the Reserve Bank decided to hold the cash rate at 3.85%.
While the pause is not as welcome as a cut, borrowers can breathe a sigh of relief. In the post-decision press conference, RBA Governor Michele Bullock explained it was more about timing than strategy, noting that economic conditions are tracking broadly in line with forecasts. Inflation is easing, wages are rising at a controlled pace, and consumer spending has slowed, and the board just needs a little more confirmation that the downward trend will hold.
“The cash rate has already fallen 50 basis points since the start of the year, so while another cut or two seems likely — and could shave hundreds of dollars off your monthly repayments — borrowers have no reason to wait,” says Mozo’s personal finance expert Rachel Wastell.
“While monetary policy takes time to trickle down, your own financial decisions can have a much more immediate effect. The smarter move is to compare and switch, as there’s often no prize for loyalty and no reward for waiting.”
Banks cut even though the RBA didn’t
Even though the RBA held the cash rate, it doesn’t mean lenders are sitting on their hands. While variable rates tend to move in response to the Reserve Bank moves, fixed rates shift based on what banks think comes next.
This week on the Mozo database, we saw this quiet shift play out across two key financial products that banks fix prices on ahead of time, term deposits and fixed rate home loans.
On Wednesday, QBANK moved swiftly to cut its fixed home loan rates across the board. Most terms were cut by 20 to 30 basis points, for owner occupiers and investors, including interest-only options. SWS Bank followed suit, with its 1-year fixed rate for both owner occupiers and investors dropping from 5.64% to 4.99%p.a. (5.99% comparison rate*) and joining 18 other lenders offering fixed rates starting with 4.
*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
But fixed home loans weren’t the only fixed term rate change. QBANK adjusted its term deposit rates, quietly pulling back its one-year term from 3.80% p.a. to 3.70% p.a., along with its six and nine-month terms. In contrast, its three-month rate jumped from 3.65% p.a. to 3.95%p.a.
QBANK wasn’t alone in cutting term deposit rates, but other lenders were more focused on trimming shorter terms. ANZ trimmed its eight-month Advance Notice term from 3.90% p.a. to 3.80% p.a. , while the Australian Military Bank made broader cuts, dropping its 1-year from 4.10% p.a. to 3.85% p.a., and taking 25 basis points off most terms. Bank of Sydney also made moves, cutting its one-year rate from 4.15% p.a. to 4.05% p.a. across personal, SMSF and business term deposit products as well as taking 5 bps off the 6 and 9 month terms.
SWSbank, Bank Australia and Coastline Bank also cut shorter terms. Bank Australia reduced 3, 6 and 9 month rates and SWS Bank reduced 3 and 6 months by roughly 25 bps. Coastline Bank sliced its 6 month term by 15bps and its 7 month by 25bps. Heritage Bank and People's Choice also shaved between 10 and 15 basis points off almost every short-term product.
Term deposits a far cry from last year
The term deposit averages on the Mozo database show a clear downward trend. Three month terms now average 3.68% p.a. six months are only slightly higher at 3.88% p.a. and the one year average is 3.80% p.a. Go out to four years and the average falls to just 3.30% p.a.
"The average term deposit rates say a lot about where the cash rate and interest rates in general are headed,” says Wastell. “They’re a far cry from rates we saw last year starting with five, and those who locked in higher rates should be thanking themselves
Banks are no longer rewarding longer terms, and they clearly don’t expect rates to stay where they are for very long. These moves matter because they give us a window into what lenders expect.
“If the banks were bracing for an extended pause, fixed rates would not be heading down," explains Wastell.
“The shift in fixed pricing suggests lenders remain confident that more cuts are coming, even if the RBA did decide to hold this week.”
Top term deposit rates under 12mths
Bank | Term | Interest Rate (p.a.) |
---|---|---|
BCU |
5 months |
4.55% |
MOVE Bank |
4 months |
4.55% |
Credit Union SA |
4 months |
4.50% |
Australian Military Bank |
6 months |
4.45% |
Australian Unity |
6 months |
4.45% |
Geelong Bank |
4 months & 5 months |
4.45% |
source: mozo.com.au as at 11 July 2025, leading term deposit rates under 1 year at a balance of $25,000 |
A decade of debt: Why the cost of loyalty has never been higher
On Tuesday, after the surprise RBA announcement, Mozo released its first Home Loan Chart Pack tracking home loan sizes, interest rates and monthly repayments to show a snapshot of the transformation of Australia’s mortgage market over the past ten years.
Mozo’s analysis showed that since 2015, average repayments on a variable home loan have surged by 98%, jumping from $2,214 a month to a staggering $4,383 today. That’s $71 more that mortgage holders are paying every single day — a figure that doesn’t just reflect rising rates, but the ballooning size of the average home loan.
Back in 2015, the average Australian home loan was $389,939, but fast forward to 2025 and that figure has climbed to $659,922 — a 69% increase fuelled by skyrocketing property prices and bigger borrowing appetites during the 2020-2022 period of ultra low rates.
But there is one silver lining.
The analysis also shows that the savings on offer for borrowers willing to switch lenders have more than doubled over the decade, rising from $180 a month in 2015 to $373 in 2025. That’s over $4,400 a year in potential savings^.
“Even if the RBA does deliver another cut this year, it might not get you a better deal than what a more competitive lender is offering right now,” says Wastell.
“In many cases, the difference between the average rate and the sharpest on the market is already bigger than one cut, so waiting could mean missing out.”
Check out Mozo’s 10-Year Home Loan Analysis Pack here.
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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Disclaimer: Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice. Target Market Determinations can be found on the provider's website. While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.
^Average and leading monthly mortgage repayment figures calculated using rates from the Mozo product database, owner occupier variable home loan rates, $500,000 loan amount, LVR 80%, principal and interest, taken from 1 June 2015 - June 2025.
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.