Home News Lenders race to drop fixed rates as RBA rate cut looms

Lenders race to drop fixed rates as RBA rate cut looms

Recent adjustments in the mortgage market saw further drops in fixed rates, while some variable rates fluctuated slightly.

By Bernadette Lunas

First published on 09 May 2025

Fact Checked

Lenders race to drop fixed rates as RBA rate cut looms

ANZ led this week's activity, slashing fixed home loan rates by up to 45 basis points.

This brought the lowest residential fixed rate from Australia's fourth-largest lender down to 5.39% p.a. (6.67% p.a. comparison rate*) for loans with an 80% maximum loan-to-value ratio (LVR).

Although the 35 basis point drop on this ANZ product is notable, it still isn't lower than Bank of Queensland's (BoQ) most competitive fixed rate.

Following its latest cuts, BoQ has broken below the 5% p.a. threshold, now offering a 4.99% p.a. fixed rate (5.77% p.a. comparison rate*) at 80% LVR for owner-occupier loans.

BoQ currently offers the lowest standard OO fixed mortgage in our database, though 5 basis points higher than Bank Australia's fixed loan available for homes meeting certain energy efficiency standards.

Fixed home loan rates tracking downwards is hardly news lately, with the RBA widely expected to drop the cash rate further at its upcoming monetary policy meeting this month.

And while the few handful of variable rate hikes squeezing into the cycle may seem unusual amid a lowering interest rate environment, it appears to be last-ditch attempt by lenders to shore up margins before the anticipated rate cuts.

ANZ cuts fixed home loan rates by up to 45 basis points

Product	New rate	Comparison rate
Residential Fixed 1 yr	5.49% p.a. (-40 bps)	6.84% p.a.*
Residential Fixed 2 yrs	5.39% p.a. (-35 bps)	6.67% p.a.*
Residential Fixed 3 yrs	5.69% p.a. (-5 bps)	6.62% p.a.*
Residential Fixed 4 yrs	5.84% p.a. (-5 bps)	6.57% p.a.*
Residential Fixed 5 yrs	5.84% p.a. (-15 bps)	6.49% p.a.*
Investment Fixed 1 yr	5.64% p.a. (-45 bps)	7.38% p.a.*
Investment Fixed 2 yrs	5.54% p.a. (-40 bps)	7.18% p.a.*
Investment Fixed 3 yrs	5.64% p.a. (-30 bps)	7.03% p.a.*
Investment Fixed 5 yrs	5.99% p.a. (-10 bps)	6.88% p.a.*

ANZ made a flurry of cuts across its range of fixed residential and investment home loan rates.

The last time the bank dropped its fixed mortgage rates was after the RBA cash rate cut in February.

ANZ's latest rate adjustments this week appear to affirm the bank's forecast for another 25 basis point cut to the country's key interest rate at the May monetary policy meeting.

This is after the underlying inflation printed at 2.9% in Q1, marking the first time the measure fell within the central bank's 2-3% inflation target since Q4 2021.

"Alongside global uncertainty, we think the easing in inflation over the past two quarters supports an RBA cash rate cut in May," ANZ economists said.

"We expect 25 bp cuts in July and August as well, to take the cash rate to 3.35% come August, to offset the potential negative impacts of the global backdrop."

It's set to be a pivotal time for new CEO Nuno Matos to lead the ship from Monday, after nearly a decade of Shayne Elliott steering things around at the country's fourth-largest bank.

BoQ cuts fixed home loan rates by 55 basis points

Product	New rate	Comparison rate
Residential Fixed 2 yrs Discount Rate, 80% LVR	4.99% p.a. (-55 bps)	5.84% p.a.*
Residential Fixed 3 yrs Discount Rate, 80% LVR	4.99% p.a. (-55 bps)	5.77% p.a.*
Residential Fixed 4 yrs Discount Rate, 80% LVR	5.29% p.a. (-55 bps)	5.80% p.a.*
Residential Fixed 5 yrs Discount Rate, 80% LVR	5.29% p.a. (-55 bps)	5.76% p.a.*
Investment Fixed 2 yrs Discount Rate, 80% LVR	5.24% p.a. (-55 bps)	6.01% p.a.*
Investment Fixed 3 yrs Discount Rate, 80% LVR	5.24% p.a. (-55 bps)	5.94% p.a.*
Investment Fixed 4 yrs Discount Rate, 80% LVR	5.54% p.a. (-55 bps)	5.99% p.a.*
Investment Fixed 5 yrs Discount Rate, 80% LVR	5.54% p.a. (-55 bps)	5.95% p.a.*

BoQ's discount rates, seen above, are available for new bank lending applications.

Existing customers and refinancers get the standard fixed rates, which are 0.35% p.a. higher.

This week's adjustments mark the second time the bank has slashed its fixed home loan rates this year, with the previous adjustments focused on variable rates following the first RBA cash rate cut since 2020 in February.

ME Bank cuts fixed home loan rate up to 45 basis points

As expected as a subsidiary of BOQ, ME Bank followed, cutting fixed home mortgage rates by up to 0.45% p.a.

ME Bank applied a uniform 40 basis point cut across its range of Member Package Flexible Fixed for owner occupiers; 45 basis points were shed from the investor home loans.

The lowest rate from the bank is now 5.14% p.a. (6.25% p.a. comparison rate*), available for new customers locking in for two years with 80% LVR.

For investors, the lowest Member Package rate is 5.34% p.a. (6.41% p.a. comparison rate*) with up to 80% LVR locked for three years.

Member Package is an optional add-on to ME Bank's flexible home loans, offering lower rates and $0 valuation and topping up fees for an additional $395 per year.

People's Choice cuts fixed rates up to 25 basis points

Product	New rate	Comparison rate
Home Loan Package OO Fixed 1 yr, ≤80% LVR	5.59% p.a. (-25 bps)	6.10% p.a.*
Home Loan Package OO Fixed 2 yrs, ≤80% LVR	5.49% p.a. (-10 bps)	6.07% p.a.*
Home Loan Package OO Fixed 3 yrs, ≤80% LVR	5.49% p.a. (-10 bps)	6.05% p.a.*
Home Loan Package INV Fixed 1 yr, ≤80% LVR	5.79% p.a. (-25 bps)	6.25% p.a.*
Home Loan Package INV Fixed 2 yrs, ≤80% LVR	5.69% p.a. (-10 bps)	6.22% p.a.*
Home Loan Package INV Fixed 3 yrs, ≤80% LVR	5.69% p.a. (-10 bps)	6.21% p.a.*

Member-owned People's Choice Bank shed up to 25 basis points from its range of fixed home loans for residents and investors.

The cuts were applied to both the standard fixed rate and the home loan package.

This may be a good opportunity for customers to lock in the People's Choice's fixed home loan package, as the bank recently announced the cessation of this product from 17 June 2025.

Newcastle Permanent cuts variable and fixed home loan rates

Product	New rate	Comparison rate
Premium Plus Package Variable P&I <80% 150k+ Special Offer	5.89% p.a. (-5 bps)	6.23% p.a.*
Premium Plus Package Investment Variable P&I 80% 150k+ Special Offer	6.09% p.a. (-4 bps)	6.07% p.a.*
Real Deal Investment P&I Special Offer 80% 150k+	5.94% p.a. (-10 bps)	6.05% p.a.*
Real Deal Investment P&I Special Offer 80–95% 150k+	6.59% p.a. (-10 bps)	6.25% p.a.*

Newcastle Permanent tweaked its variable rate package home loans for owner occupiers and investors, shedding up to 5 basis points in the same week it further dropped fixed rates.

Premium Plus package features a 100% offset account and flexible repayment options, in addition to other benefits including waived fees on personal loan application, $0 annual fee on Value+ credit card, and car insurance discount.

Meanwhile, Real Deal home loan comes with no ongoing fees, redraw facility, and flexible repayment and split loan options.

Newcastle Permanent's lowest standard residential fixed rate is now 5.49% p.a. (7.72% p.a. comparison rate*), available through a special offer for OO customers locking in for two years.

For investors, the current lowest rate is 5.59% p.a. (77.4% p.a. comparison rate*) fixed for three years.

More variable home loan rate movements

Greater Bank lowered Great Rate Discount variable home loan rates by a uniform 10 basis points.

Owner occupiers paying principal and interest can get 5.74% p.a. (5.75% p.a. comparison rate*), with 80% LVR.

Investors are offered 5.99% p.a. (6.00% p.a. comparison rate*) with 80% LVR.

Greater Bank also decreased Ultimate Discount variable home loan rates by up to 25 basis points.

On the other hand, Australian Unity hiked Kick Starter variable home loan rates by 10 basis points, with the bank poised for takeover by Bank Australia in late 2025.

Other fixed rate movers

Greater Bank cuts fixed home loan rates by up to 30 bps
Heritage Bank cuts fixed rates by up to 25 bps.
Queensland Country Bank cuts fixed home loan rates by 10 bps.
The Capricornian cuts fixed home loan rates up to 70 bps.
The Mutual Bank cuts fixed rates by up to 20 bps.

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Loan purpose

Loan amount

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Lender	Home Loan	Interest Rate	Comparison Rate*	Monthly Repayment	Repayment type	Rate Type	Ongoing Fees	Upfront Fees	Max LVR	Row Tags	Features	Link	Compare	Promoted Product	Disclosure
Regional Australia Bank	Regional Australia Bank Home Loan without Offset - OO,PI LVR 60% or less	5.69% p.a.	5.70% p.a.	$2,899	Principal & Interest	Variable	$0	$0	60%	Up to $4k Cashback Owner Occupier Variable Principal & Interest 40% Min Deposit Redraw More details	Up to $4k cashback when you take a loan with us (Terms and Conditions apply) Quick and Easy online application, with no upfront or annual fees. Unlimited additional repayments free of charge.	More details	Compare	Promoted	Disclosure
loans.com.au	loans.com.au Variable Home Loan P&I <90%	5.79% p.a.	5.83% p.a.	$2,931	Principal & Interest	Variable	$0	$530	90%	Owner Occupier Variable Principal & Interest 10% Min Deposit Redraw Extra Repayments More details	Available for purchase or refinance, min 10% deposit needed to qualify. No application, ongoing monthly or annual fees. Quick and easy online application process.	More details	Compare	Promoted	Disclosure
Unloan	Unloan Variable Rate Home Loan LVR < 80%	5.74% p.a.	5.65% p.a.	$2,915	Principal & Interest	Variable	$0	$0	80%	100% owned by Commbank Owner Occupier Variable Principal & Interest 20% Min Deposit Redraw More details	No application or ongoing fees. Annual rate discount Unlimited redraws & additional repayments. LVR <80% A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.	More details	Compare	Promoted	Disclosure
Ubank (part of NAB)	Ubank (part of NAB) Flex variable home loan - 100% offset	5.84% p.a.	6.08% p.a.	$2,947	Principal & Interest	Variable	$250	$250	60%	100% offset Owner Occupier Variable Principal & Interest 40% Min Deposit Offset Redraw More details	Easy application. Fast approval. 100% offset. Unlimited additional repayments free of charge. Redraw available - Access additional payments.	More details	Compare	Promoted	Disclosure

Important Information and Comparison Rate Warning

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. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. 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 . View disclaimer.

Important Information and Comparison Rate Warning

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Bernadette Lunas

Bernadette is a journalist with years of experience covering topics in macroeconomics, real estate, and lifestyle beats for notable print media organisations. She joined the InfoChoice Group in 2024, bringing her passion for writing stories that help Australians make better decisions about money.

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For home loans, the base criteria include a $500,000 loan amount over 30 years. For car loans, the base criteria include a $30,000 loan over 5 years. For personal loans, the base criteria include a $20,000 loan over 5 years. These rates are only examples and may not include all fees and charges.

*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.

Monthly Repayment Figures

Monthly repayment figures are estimates that exclude fees. These estimates are based on the advertised rates for the specified term and loan amount. Actual repayments will depend on your circumstances and interest rate changes.

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.

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