Which lenders were quickest to react to RBA rate cut?

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on March 03, 2020
Which lenders were quickest to react to RBA rate cut?

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. 

Lender

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWSSPECIAL OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
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100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
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ZERO APPLICATION FEESFEE FREE OFFSET
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
  • The shorter your loan, the less interest you pay in the long run.
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
  • The shorter your loan, the less interest you pay in the long run.
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO APPLICATION FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO APPLICATION FEES

Yard Home Loan (Principal and Interest) (LVR < 80%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO UPFRONT OR ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO UPFRONT OR ONGOING FEES

Owner Occupier Accelerates - Evaporate (LVR 60%-70%) (Principal and Interest)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO UPFRONT OR ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO UPFRONT OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 80%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
UNLIMITED EXTRA REPAYMENTS
UNLIMITED EXTRA REPAYMENTS

Basic Home Loan (Principal and Interest) (LVR < 60%)

    Variable
    More details
    EASY DIGITAL APPLICATION
    EASY DIGITAL APPLICATION

    Neat Variable Home Loan (Principal and Interest) (LVR 70%-80%)

      Variable
      More details
      $0 APPLICATION FEE
      $0 APPLICATION FEE

      Budget Home Loan (Principal and Interest) (LVR < 80%)

        Variable
        More details
        100% FULL OFFSET ACCOUNT
        100% FULL OFFSET ACCOUNT

        Offset Package Home Loan (Principal and Interest) (LVR < 60%)

          Variable
          More details
          LIMITED TIME OFFER
          • Fast turnaround times, can meet 30-day settlement
          • No ongoing or monthly fees, add offset for 0.10%
          • Extra repayments + redraw services
          LIMITED TIME OFFER

          Smart Booster Home Loan Discounted Variable - 1yr

          • Fast turnaround times, can meet 30-day settlement
          • No ongoing or monthly fees, add offset for 0.10%
          • Extra repayments + redraw services

          Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of June 26, 2022. View disclaimer.

          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."

          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. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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          author-avatar
          Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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