Photo by Jared Sluyter on Unsplash
After the Reserve Bank cut the official cash rate to 0.50% today, some lenders were quick to pass on the rate cut in full.
Before today's rate cut, some commentators warned borrowers not to expect the banks to pass on the rate cuts, but a handful of lenders have wasted no time in passing on the cut.
For rolling updates of which banks have passed on the cut, stay tuned to our RBA rate cut page.
Thinking about refinancing to a low-rate, variable owner-occupier home loan? Below are a handful of low-rate loans on the market.

Smart Booster Home Loan
Product Features
- Discount variable for 1 year <=80% LVR
- No ongoing fees
- Unlimited redraw facility
Monthly repayments: $1,476
Advertised
Rate (p.a.)
1.99%
Comparison
Rate (p.a.)
2.47%
Product Features
- Discount variable for 1 year
- No ongoing fees
- Unlimited redraw facility
Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) owner-occupied home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
86 400
Neobank 86 400 was the first to pass on the full 25 basis point cut.
The cut applies to new and existing owner-occupied and investment home loan customers, in effect from tomorrow (March 4).
This brings 86 400's variable rate for owner-occupiers paying principal and interest down to 2.84% p.a. (comparison rate 3.12% p.a.) which amounts to $1,250 in savings based on an average new loan of $500,000.
86 400 is currently the only neobank to offer home loans.
Robert Bell, CEO of 86 400 said the new bank is committed to putting customers first.
"After launching our home loan products late last year, this has been our first opportunity to address a rate cut. As an agile bank, we can make the obvious and simple decisions quicker to put money back in our customers’ pockets," he said.
"Passing on the full rate cut today underscores our commitment to helping Australians take control of their money. Whether that’s in saving for a home, simplifying and speeding up the mortgage process or paying their loan off faster through a better rate.”
Athena rate cut
Athena also wasted no time, immediately passing on the cut in full. The 25 basis point cut applies to new and existing customers on variable rate home loans who are owner-occupiers and investors.
This brings Athena's rate down to 2.59% p.a. (2.55% p.a. comp rate*) for owner-occupier, principal and interest borrowers with up to 80% LVR.
Athena have been one of the only lenders to immediately pass on the full rate cut for the last four announcements.
"None of the 12 largest home loan lenders have done this," said Athena CEO Nathan Walsh.
"This is money that should be in the pockets of Aussie families."
For the fourth time in a row, Athena immediately passed on the RBA rate cut in full to all customers. None of the 12 largest home lenders have done this. This is money that should be in the pockets of Aussie families!
— Nathan Walsh (@NathanW_Athena) March 3, 2020
Check us out at https://t.co/s2VvaHMbCw pic.twitter.com/ZrrC7McK0h
According to Athena, a family with a typical home loan could save as much as $120,000 and shave five years off their mortgage if they kept their repayments unchanged as rates fell.
Mr Walsh said Aussies should challenge their bank if they haven't received a cut.
"If they don't drop your rate in full, then drop your bank. The savings opportunity is too important to be short changed."
Westpac rate cut
Westpac was the first of the big four to pass on the rate cut in full, announcing the changes within four minutes.
This announcement came as a surprise to many banking analysts who had been expecting the big four to hold back some of the rate cut, as they had done previously.
The cut applies to all variable rate home loans for investors and owner-occupiers, effective from 17 March.
- Variable home loan (owner occupier) rate has been reduced by 0.25% p.a. to 4.58% p.a. for customers with principal and interest repayments.
- Variable residential investment property loan rate reduced by 0.25% p.a. to 5.13% p.a. for customers with principal and interest repayments.
- Variable home loan (owner occupier) rate reduced by 0.25% p.a. to 5.17% p.a. for customers with interest only repayments.
- Variable residential investment property loan rate reduced by 0.25% p.a. to 5.39% p.a. for customers with interest only repayments.
Westpac chief economist Bill Evans said the cut was needed.
"With the virus impacting an economy that was already weak it was absolutely necessary to provide more support although the Reserve Bank does not recognise that risk in the Governor’s Statement," he said.
Mr Evans said the bank expects another rate cut in April.
"It was been Westpac’s forecast that the RBA will act again in April for much the same reasons that we have seen today – helping to assist the Australian economy to deal with the shocks associated with the virus; falling into line with other central banks’ stimulatory policies, particularly to ensure that the Australian dollar remains competitive and working in conjunction with the Australian Government to deal with the issues," Mr Evans said.
"It seems that the coronavirus has brought the Government and the Reserve Bank together to address the risks with complementary policies. That “partnership” is unlikely to end with this single move by the RBA."
CBA rate cut
Commonwealth Bank was the second of the big four banks to pass on the rate cut in full. The cut will apply to all variable rate home loans for new and existing customers with owner-occupier and investment loans.
CBA's new rates are:
- Owner-occupied principal and interest standard variable rate home loans reduced by 0.25% (p.a.) to 4.55% p.a.
- Investor principal and interest standard variable rate home loans reduced by 0.25% p.a. to 5.13% p.a.
- Owner-occupied interest-only standard variable rate home loans reduced by 0.25% p.a. to 5.04% p.a.
- Investor interest-only standard variable rate home loans reduced by 0.25% p.a. to 5.39% p.a.
Angus Sullivan, Group Executive Retail Banking Services said CBA's new rates are some of the lowest on record.
“In responding to this latest official interest rate cut we have examined the important role we play in supporting the Australian economy and the unique set of circumstances facing the country," he said.
“Today’s announcement means our SVR for Owner Occupied customers, with Principal and Interest repayments, will be one of the lowest on record.”
Disclaimers
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.
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