Mozo Money Moves: Big Banks cut ahead of the RBA, term deposit rates slip into the 3s and home loan competition heats up

As we reach the end of the financial year, we’re also staring down the next cash rate decision from the Reserve Bank of Australia (RBA), which will determine whether it’s time for a third rate cut, as NAB has forecasted, or as Commbank, ANZ and Westpac predict, whether the board will hold steady until the August meeting.

“Global volatility is also keeping the RBA cautious, as rising oil prices, ongoing shipping delays and renewed geopolitical tensions and conflicts muddy the near-term inflation outlook,” says Rachel Wastell, Mozo’s finance expert.

“With so much uncertainty still in play, the board is unlikely to move again until they’ve got a clearer read on where things are heading,” says Wastell. That view aligns with Westpac’s forecast, with Chief Economist Luci Ellis confirming this week the bank still expects two more cuts in 2025 — one in August and another in November, both by 0.25%.

Regardless of whether the RBA moves in July, it’s likely rates will continue to drop, as the effects of the May rate cut continue to flow through to consumers. This week we’ve seen further movement particularly in savings and term deposit rates, new home loan product launches and a major bank cut the starting rate of its unsecured personal loan.

NAB cuts early, signalling more pain ahead for savers.

Despite most banks having already passed on the RBA’s 0.25% rate cut from May to their savings accounts, deposit rates are continuing to fall — and now one of the big four is making a pre emptive move that could be a double blow for savers.

Today, NAB trimmed the ongoing bonus rate on its Reward Saver account by 0.05%, down to 4.35% p.a., with that rate only available if savers make no withdrawals and ensure at least one deposit is received by NAB before the second-last banking day of the month. If those conditions aren’t met, the rate drops to just 0.10% p.a. 

“NAB is the only major bank forecasting another 0.25% cut from the RBA in July, so today’s move suggests they’re setting the stage for a double blow to savers,” says Wastell.

“This isn’t just pricing in expectations, it’s trimming savings rates now with the assumption they’ll need to be cut again after the next RBA meeting. And if they’re right? NAB savers could be looking at two rate reductions in a matter of weeks.”

“That’s a tough pill to swallow for anyone trying to grow their savings.”

How does NAB compare?

Compared to its big four rivals, NAB’s offer is now trailing across the board. ANZ’s traditional savings account pays a lower 3.50% p.a., but the bank is clearly nudging customers towards its digital-only brand ANZ Plus, which has a bonus rate savings account offering 4.50% p.a. (dropping to 0.15% p.a. If conditions aren’t met). Meanwhile, CBA’s GoalSaver offers 4.45% p.a. (dropping to 0.30% p.a. if savers can’t meet conditions), and Westpac’s Life account sits at 4.50% p.a. (for savers over 30 who do not qualify for the 5.00%p.a. rate on offer for 18-29 year olds), with a base rate of 0.40% p.a. if conditions aren’t met.

“Among the majors, NAB is now behind on both the bonus rate and the fallback rate if bonus rate conditions are not met,” says Wastell. “But – truthfully, if you want the best rate, it won’t be from the Big Four, as challengers and customer owned banks are the ones leading the pack right now.’

Top Ongoing Bonus Savings Rates

Savers hoping to lock in rates starting with 4 should act fast.

Term deposit rates are continuing their downward tumble, with 249 rate cuts to term deposits on the Mozo database in June, compared to just 31 increases. Most of the cuts have been concentrated in the headline terms of 6, 9 and 12 months, but in terms of the size of the cuts it's from eight months onwards we are seeing the deepest cuts, with an average of 20 basis point cuts.

This week, NAB joined the action trimming 0.10% off its 6–11 month and 13–23 month terms, and 0.15% off its 2-year rate, following similar moves from ANZ on Tuesday when they cut 0.20% off all term deposit rates on the Advance Notice Term Deposit from 2-month to 2-year terms, amid a growing list of others.

The result is clear in the averages, with all rates bar 1 and 2 months which start with 1, starting with 3. The highest average rate is for the 6 month term at 3.95%, and 12-month terms now average just 3.84%p.a. Average for longer terms above two years are now all below 3.49%p.a..

“While a few headline rates from market leaders like Judo Bank and Heartland Bank boast over 4.00%p.a, these are disappearing fast,” says Wastell.

“Rates starting with a 3 are quickly becoming the new normal, so for savers still hoping to lock in something higher, now may be the window. The market is shifting quickly, and it’s not shifting up.”

60 home loans now offer rates 5.49%p.a. or lower

With two RBA cuts now having filtered through the Mozo database, the shift in variable home loan rates is clear, and the average rate is creeping closer to 6.00%. Before the first rate cut came through in February, the average variable home loan rate (LVR 80%, Owner Occupier, Principal & Interest, $500k) has dropped from 6.71% p.a. in January to 6.16% p.a. as of today.

That’s more than half a percent, 5 basis points more than the RBA cut by. This might not sound huge on paper, but for borrowers, it’s the first real relief they’ve seen since the aggressive rate hiking cycle began just over three years ago.

On the Mozo database as of 20 June 2025, there are now 60+ home loan variable rate products [across all LVRs for a $500,000 owner occupier home loan paying principal and interest] offering rates of 5.49% p.a. or below.  

The leading rate on the Mozo database in this product category is from Police Bank for their First Home Loan Variable (Owner Occupier, Principal & Interest, LVR 80-98%) with a variable rate of 5.34% p.a. (5.41% p.a. comparison rate*), available to first home buyers eligible for a Housing Australia Scheme loan with a Government guarantee.

“We’re definitely starting to see more competitive variable rates creep into the market, and there’s growing evidence lenders are trying to attract borrowers not just on rate, but on features, flexibility and digital access,” says Wastell.

*WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

ME Bank launches new loans, but BOQ still wins on fees

In fact, this week ME Bank, owned by the Bank of Queensland (BOQ), launched two new variable rate home loans, available exclusively through its ME Go app. The first — EconoME — is a no-frills product with unlimited extra repayments and a redraw facility. The second — CompleteME — adds up to ten offset accounts, but comes with a $395 annual fee.

While both products are clearly designed for digital borrowers, they closely resemble what’s already available from Virgin Money, which also sits under the BOQ umbrella. Virgin relaunched its variable loan range earlier this month with similar structures, a basic and an offset option, and while the offset loan carries a slightly lower $295 annual fee, it comes bundled with Virgin Money Points, which may appeal to borrowers focused on rewards points.

Interestingly, BOQ’s own, nearly identical variable loans — Economy and Clear Path — have a flat $10 monthly fee. That adds up to $120 annually and makes it the cheapest on paper out of the three. Given the structure and rates are otherwise almost interchangeable, is this a tactic to keep the parent brand sharper? Whatever the reason, it's hard to ignore the pricing hierarchy on similar products.

Westpac cuts personal loan rates

While home loan and savings rates have both shifted noticeably following the RBA’s May cut, personal loan rates have moved far less, which Mozo’s recent 10 year analysis of changes in the cash rate and average lending rates revealed. 

“Not all variable rate financial products respond in the same way or at the same pace to RBA rate changes,” explains Wastell. “When it comes to personal loans in particular, this is not because lenders aren’t adjusting rates, but more because of the shift toward risk-based pricing, which has made these changes harder to track at face value.”

Mozo analysis shows the number of providers using risk-based pricing models has grown by 10% since March 2021, and by nearly 50% since 2018, which means the gap between what’s advertised and what customers actually pay can vary widely based on credit history, income, and other profile data.

“It’s the kind of move we’ve seen more of in recent years, where starting rates are kept low, but maximum rates remain at levels sometimes three times higher, which only benefits lower-risk borrowers.”

This is very evident in the move from Westpac this week to cut 50 basis points off the entry-level rate for its Unsecured Personal Loan. The move brought the minimum advertised rate down to 7.49% p.a. (comparison rate** 8.68% p.a.) while the maximum rate in the range on this Westpac Unsecured Personal Loan remains unchanged at 20.49% p.a. – close to three times the starting rate.

In comparison to the leading starting rates for unsecured personal loans, the Westpac loan’s starting rate is still almost 2% higher than the leading rate from Harmoney, but interestingly its maximum rate is roughly 3.5% less. Meaning a high risk borrower could end up getting a lower rate with Westpac, despite its starting rate being much higher than the leading rate. 

“Basically, the way personal loans are now priced, the same personal loan product could cost vastly different amounts depending on who’s approved and at what rate,” explains Wastell.

“Two borrowers taking out the exact same $10,000 personal loan could be making wildly different repayments, depending on their risk profile.” 

So while it may look like rates are falling, the reality is a bit more complex. Starting rate cuts can make these products appear much more competitive, but borrowers should be careful to check the maximum rates charged, to ensure they’re getting the best deal.

Top Unsecured Personal Loans (Min & Max Rates)

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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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