Mozo Live: RBA decision looms, Big Four banks and markets weigh in, how much you could save in repayments

Today’s blog is now closed. You can stay up-to-date with the latest banking news and interest rate updates over on our latest live blog.

If the RBA cuts rates tomorrow and lenders pass on the rate cut in full, homeowners could see meaningful savings on their loan repayments.

According to Mozo’s latest analysis, the average borrower with a $660,000 home loan could save around $101 per month, or $1,209 per year, if their interest rate dropped from 6.10% p.a. to 5.85% p.a.

Here’s how the savings stack up across different loan sizes:

If a ‘super-sized’ cut were to occur – as predicted by NAB – the average borrower with a $660,000 home loan could save around $200 per month, or $2,404 per year, if their interest rate dropped from 6.10% p.a. to 5.60% p.a. Here’s how the savings stack up across different loan sizes:

With rates still well above pre-2022 levels, even if the RBA opts for a more modest cut, it'd provide welcome relief to stretched household budgets.

HSBC has lowered its fixed home loan rates prior to the RBA's rate call.

Fixed 1-year rates have been cut by 30 basis points, with the lowest now at 5.34% p.a. for borrowers with a loan-to-value ratio (LVR) under 60%. Other 1-year rates range up to 6.14% p.a., depending on the LVR tier.

Fixed 2-, 3-, 4-, and 5-year terms have each been reduced by 25 basis points. Following the change, fixed 2-year rates start from 5.24% p.a., 3-year from 5.24% p.a., 4-year from 5.44% p.a., and 5-year from 5.44% p.a. These rate reductions apply to principal and interest loans on the Home Loan Package for owner occupiers with LVRs under 90%.

All changes took effect today, Monday 19 May 2025.

See below for some of the standout rate adjustments.

HSBC fixed rates (owner occupier, P&I, Home Loan Package)

Discover recent fixed rate changes in the latest edition of Money Moves.

Several economists and financial institutions are predicting a rate cut tomorrow afternoon. One of the Big Four banks even suggests that the Reserve Bank of Australia (RBA) will make a ‘super-sized’ (-0.50%) cut to the cash rate at the monetary policy meeting announcement on 20 May.​

Here’s the outlook from major institutions and market commentators:

• National Australia Bank (NAB) continues to forecast a 50 basis point cut in May, which would reduce the cash rate from 4.10% to 3.60%. The bank projects further cuts, expecting the rate to reach 2.60% by February 2026.
• ANZ tempered its earlier outlook and now anticipates a 25 basis point cut in May to 3.85%. The bank predicts the cash rate to reach 3.35% by August 2025.
• CBA says softening economic conditions is likely to encourage the RBA to cut in May. The bank is projecting a total of 75 basis points in cuts by the end of 2025, which would lower the cash rate to 3.35%.
• Westpac expects the RBA to cut the cash rate by 25 basis points in May. With inflation now within the 2-3% target range and consumer sentiment and spending still weak, the bank insists current policy remains too tight. A more unsettled global outlook adds to the case for further easing.
• The ASX RBA Rate Indicator shows market participants are pricing in a 25 basis point cut at May's meeting. The tracker has shown a 100% expectation of a cut to 3.85% since early this month, although on 16 May the indicator slipped to 96%.

The RBA's decision will be handed down at 2:30pm on May 20, 2025. Stay tuned to Mozo’s Live Blog over the next few days for the decision, further analysis, and to find out which providers pass on any rate cuts.