Mozo Money Moves: RBA cuts but the banks stagger relief as deposit rates dive

Welcome back to Mozo Money Moves, your weekly personal finance wrap that dives into the data, to share what’s been happening behind the scenes in retail banking.

This week was a big one, as the Reserve Bank of Australia (RBA) cut the cash rate by 25 basis points to 3.85%. As expected, some lenders acted fast, while others are leaving borrowers and savers waiting and the majority of moves and announcements have been in the savings and home loans space.

Time to break down what the cut means, how many more could be coming, and which banks are playing fair with customers.

RBA cuts again – but don’t mistake it for a ‘cutting spree’

On Tuesday, the RBA made its second rate cut of 2025, taking the cash rate from 4.10% to 3.85% – the first time it’s started with ‘3’ in two years. 

Before the decision, NAB made headlines by floating the idea of a supersized 0.50% cut, but as Mozo predicted the 25 basis point move won out – which historically is the move the RBA favours. NAB has since walked back its expectations predicting  the cash rate will bottom out at 3.10%.

“While the decision was made with a level of confidence that inflation is now sitting comfortably inside its 2–3% target band, don’t mistake two cuts for a cutting spree,” says Mozo finance expert Rachel Wastell. 

“The central bank has been relatively cautious over the past few years, with a longer pause and slower hiking cycle than other advanced economies, waiting until the data gave them enough confidence to act.

While the RBA Board did consider a bigger move in their Statement on Monetary Policy, they “confidently” settled on a standard cut. Governor Michele Bullock also flagged rising global uncertainty and  low productivity as reasons to stay cautious in the press conference following the decision.

“More cuts are likely, but I doubt they’ll come thick and fast,” said Wastell. “There are five meetings left this year, and the Big Four are predicting just two to three more cuts. It’s very possible the RBA will hold fire next round.”

What are the Big Four predicting will happen to the RBA cash rate?

• Westpac: 3.60% by September, 3.35% by December
• NAB: 3.35% by September, 3.10% by December
• CommBank: 3.60% by September, 3.35% by December
• ANZ: 3.35% by September, holding steady after that

Keep up to date with the Big Four forecasts.

Some lenders move fast, but others keep borrowers waiting

After the RBA delivered its cash rate cut on Tuesday, some lenders had their hands on the pulse. Athena Home Loans was first to move, passing on the rate cut to all variable rate home loan customers immediately, with Athena’s CEO Nathan Walsh stating that being “fiercely fair” is core to their mission.

Not far behind, CBA-backed digital lender Unloan cut 25 basis points off its variable rates, landing its Variable Home Loan product for owner occupiers with at least a 20% deposit at a market-leading 5.49% p.a. or 5.40% comparison rate*.

 *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.

While Athena and Unloan cater exclusively to home loan customers, today Macquarie became the first lender that also offers savings accounts to pass on the RBA cut across variable home loans and savings accounts. The same day changes have put Macquarie ahead of the Big Four, who are once again staggering their response to savings and home loan cuts into the week following the RBA cut.

Ben Perham, Macquarie’s Head of Personal Banking told Mozo that he understands why customers get frustrated when banks delay relief, and that’s “not our approach”. Perham stressed that Macquarie’s focus on “transparency and simplicity” gives customers access to a great rate with none of the hoops and catches.

So far there have been no lenders choosing to keep the rate cut for themselves, even Virgin Money - who decided to hold back the cut last time - will be passing this onto their home loan customers.

Looking at the Big Four banks:

• NAB cut its Reward Saver and iSaver rates today – a 3 day delay from the RBA cut, but won’t cut home loan rates until Friday 30 May — a 10-day delay from the RBA cut and 7 day delay from the savings cut.
• Westpac will reduce savings rates on 30 May – a 10 day delay from the RBA cut, and wait until 3 June to lower variable home loan rates — a 13-day delay from the RBA cut and 7 day delay from the savings cut.
• CBA and ANZ are yet to confirm changes to savings rates, but if they repeat their pattern from the last cycle, borrowers could expect savings cuts to land on 30 May, the same day as they will cut variable rates. This would equate to a 10 day delay from the RBA cut.

“This is the kind of thing that keeps me up at night,” says Wastell. “Too often we see savings rates slashed straight away, while mortgage customers are left waiting for relief.

“It’s also not just about the rate, but about the timing, the transparency, and knowing when you should start thinking about moving your money.”

Mozo research shows the best home loan rates are coming from smaller, digital-first lenders, but despite this, 72% of the owner occupier home loan market remain with a Big Four bank.

“Not one Big Four Bank makes the list of the top 40 cheapest variable rates right now, unless you count Unloan, which operates independently from CommBank, and Macquarie,” said Wastell. 

“ANZ’s digital brand ANZ Plus will jump closer to the top after their rate cut kicks in next week — but that’s still a week of higher rates borrowers are footing the bill for, while banks reap the benefits of the RBA cut.”

Which lenders are passing on the RBA cut in full?

As of 4pm on Friday 23 May 2025, 55 lenders have announced they will be passing on the cash rate cut in full to variable rate mortgage holders, leaving just 34 to announce. Three lenders have already moved (Athena, Unloan and Macquarie), 18 will move next week, 28 the following week and 6 the week after that.

All Big Four Banks will have passed on the cuts to variable rate mortgage holders by Tuesday 3 June 2025, two weeks after the RBA decision.

Mozo’s senior writer Peter Teralato covers key rate cut announcements from major banks in Mozo’s Rate Tracker Table. This table tracks which lenders are adjusting their variable home loan rates, how much they will cut by, and the specific date as to when the changes will take effect.

If you’d prefer to get Mozo’s RBA insights delivered straight to your inbox, you can subscribe to MoneyZone, our weekly newsletter.

Expected leading lenders after the cuts.

Term Deposits nosedive, 137 cuts in 3 days.

It’s safe to say that the savers who acted early in the high-rate era of the last few years were the quiet winners. As the RBA held off on cuts through 2023 and into early 2024, term deposit rates soared well above 5%, which is something Mozo hadn’t tracked in over a decade.

“That slower cycle gave savvy savers time to lock in strong returns, and those who did are probably feeling pretty smug right now,” says Wastell, “but those who held out for something better have missed out, as hundreds of cuts have come through deposits.”

Mozo tracked more than 650 term deposit rate cuts this year, with April delivering the sharpest drop. The steepest declines have come from 1-year terms — where rates from major banks are now firmly back in the 3s.

According to the Mozo database, the highest 1-year term deposit rate on a $25,000 balance now sits at just 4.50% from Qudos Bank — a long way from the 5%+ golden window we saw six months ago.

After the rate cut, term deposits tumbled even further, with 137 cuts coming through the Mozo database since Tuesday.

“Savers who acted while the market was hot locked in returns we may not see again for some time," says Wastell. “For everyone else, it’s now about being smarter with what’s left on the table.”

Leading Term Deposit Rates

Savings rates hold up, but with conditions attached

Savings accounts have held up a little better, particularly bonus saver accounts and intro rates, but since the first rate cut in February those too are on a downward slide, and as this week’s cut comes into play and rate cuts continue, they’re set to slip down much further. While some banks are still offering rates above 5%, they come with strings attached and hoops to jump through.

“There are still high rates out there, but if you’re not jumping through the right hoops each month, you’re probably not getting the highest rate,” Wastell said. 

“And we’re seeing the base rates of interest, which is the rate you earn if you miss those conditions, get lower too. There’s still value to be found, but savers will have to work for it.”

What should savers do as rates fall?

• Lock in while you still can – Even a 4.50% term deposit today could look generous in a year’s time.
• Don’t stay loyal by default – The gap between a Big Four savings rate and a market leader could cost you $177 a year on a $25,000 balance (Mozo Savings Report, p.21).
• Check the fine print – If your savings account advertises a high rate, read the conditions. If you’re not ticking every box monthly, you’re likely earning a lot less than you think.

To see which banks are offering you some of the highest rates, compare savings accounts here.

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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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