RBA cuts cash rate to 3.60%. Which banks passed on the cut?

The Reserve Bank of Australia (RBA) trimmed the cash rate at its latest meeting in August – down 25 basis points from 3.85% to 3.60%. 

This marks the third rate cut of 2025, following the first in mid-February and another in May, reflecting the central bank's response to easing inflation and current economic conditions.

What does this mean for borrowers?

Today’s decision means prospective buyers might begin comparing home loan options, while existing mortgage holders may be considering next steps to take advantage of rate cuts.

While the RBA has trimmed the cash rate, banks have no obligation to pass these cuts on to borrowers. Additionally, it can take several months for the effects of a rate cut to be fully felt. Banks tend to prioritise new customers and refinancers over existing mortgage holders.

Which banks have passed on the rate cut to borrowers?

When the RBA cuts the official cash rate, lenders can choose whether to pass the savings on to variable rate home loan customers. Some banks reduce rates in full, while others make partial cuts or delay changes. The table below tracks which lenders have adjusted their variable home loan rates, how much they’ve cut, and the specific date the changes will take effect.

How much will you save on your repayments? 

Plug your current home loan rates into our calculator to see how much you could save.

Why did the RBA cut?

The RBA’s decision to lower the cash rate in August was based on several factors:

• Inflation is back on target. The latest quarterly Consumer Price Index (CPI) data showed that annual inflation fell to 2.1% in the 12 months to June 2025 , a decrease from 2.4% in the March quarter. This puts inflation sustainably back within the RBA's 2-3% target band. Underlying inflation (trimmed mean) also eased, falling to 2.7% in the June quarter, from 2.9% in the March quarter.
• Slowing economic growth. Annual GDP growth has slowed to 1.3%, according to the latest national accounts release , highlighting a significant loss of economic momentum. Partial data for early 2025 also suggests a softer pickup in household consumption than previously anticipated.
• Emerging labour market slack. The labour market is showing signs of cooling. The unemployment rate rose to 4.3% in June 2025 , up from 4.1% in May. While employment remains resilient, broader labour market slack is emerging as participation increases and job creation thins, particularly in full-time roles.
• Cautious consumer spending. Retail trade continues to show signs of stagnation. Australian retail turnover rose a modest 0.2% in May , following a flat result in April. This signals cautious consumer spending despite ongoing population growth.
• Global uncertainty. The RBA has noted that the global outlook has worsened and is more unpredictable than usual due to rising trade policy uncertainty and its potential to weigh on global economic activity. This adds to the case for domestic monetary easing to support the economy.

When will the RBA cut rates again?

Following this latest cut, borrowers are still hoping for further relief, pondering if and when will the RBA move again. The central bank has signalled that future decisions will depend on incoming economic data, particularly inflation, wages, and employment figures.

In its statement on monetary policy , the RBA said staff forecasts suggest underlying inflation will continue to moderate to around the midpoint of the 2-3 percent range, with the cash rate to follow a gradual easing path. Uncertainty in the world economy remains elevated and trade policy developments are still expected to have an adverse effect on global economic activity.

All of the Big Four banks are forecasting another cash rate reduction before the end of 2025.

See our Interest Rate Tracker to find out which providers pass on rate cuts – and which don’t.