You can keep track of which lenders are passing on the RBA's latest cut here. 

With the COVID-19 pandemic decimating the Australian economy, the Reserve Bank (RBA) made the decision today to cut the cash rate for a second time this month to a record low 0.25% and commence quantitative easing.

When the RBA cut the cash rate earlier this month, the majority of lenders in Australia passed on the last March rate cut in full amid pressure from the Treasurer and Prime Minister.

But with many banks' profit margins squeezed to their absolute breaking point, more lenders might fail to pass on today's emergency cut.  

So how did Australia's big four banks respond?

Only ANZ announced a cut to variable rates, of 15 basis points, while it and the other three banks made sweeping changes to fixed rates and allowed customers to defer loan repayments for up to six months.

Check out the full list of changes below.

Thinking about refinancing to a low-rate, variable owner-occupier home loan? The table below displays some of the lowest-rate variable home loans currently on the market for owner occupiers:

Lender

VariableMore details
Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
Online ExclusiveUp To $4K Cashback

loans.com.au – Variable Basic Cashback Home Loan (Principal and Interest) (LVR < 70%)

  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
VariableMore details
Refinance OnlyApply In Minutes
  • 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.
Refinance OnlyApply In Minutes

Unloan – Variable Rate Home Loan – Refinance Only

  • 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.
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 March 1, 2024. View disclaimer.

Commonwealth Bank response

Not long after the RBA announcement, CommBank (CBA) announced on Twitter they would not be passing on the rate cut to standard variable rates. 

Instead, Australia's biggest bank announced:

  • 100 bps interest rate reduction for all existing cash-linked small business loans
  • 70 bps interest rate reduction in one, two and three year fixed home loan rates for owner occupiers paying principal and interest to 2.29% p.a. (*comparison rate yet to be confirmed)
  • 60 bps increase in 12-month term deposits to 1.70% p.a.
  • Changes to home loan repayments which will release up to $3.6 bn in cash for Australian households

What they said

CommBank CEO Matt Comyn said the bank recognised the turbulent and unprecedented times that we were living in and they were doing everything they could to support customers. 

“These are unprecedented times, and they call for unprecedented measures.

“Following today’s reduction in the official cash rate by 25bps we are taking deliberate steps to further support parts of the economy most in need.

“For homeowners, we are announcing our lowest advertised interest rate ever – 2.29% p.a. fixed for one, two and three year terms for owner occupier customers on principal and interest repayments. We are making this offer available to new and existing customers allowing them to lock in historically low rates. Variable home loan rates remain unchanged.

 “We will also help up to 730,000 customers by reducing repayments to the minimum required under their loan contract, from 1 May. On average, this will release up to $400 per month for customers and create up to $3.6bn in additional cash support for the economy."

[Customers wishing to continue making larger repayments will be able to opt out of this reduction from May 1. Check out Savings.com.au's guide on whether you should lower your home loan repayments.] 

“For our deposit customers, we will increase our 12 month term deposit rate by 60 bps to 1.70% p.a.. This will be available to all personal customers, but will especially benefit older Australians relying on their savings. It will ensure all Australians are now able to earn a return on their savings which is more than 1.45% higher than the official cash rate.

“Small businesses will benefit from an interest rate reduction of 100 bps on all business loans linked to the cash rate. This is in addition to a range of measures announced last week which are available for businesses facing difficulty including waiving merchant fees, waiving redraw fees, waiving early redraw fees on business term deposit accounts, and deferring repayments on vehicle and equipment finance loans."

Want to earn a fixed interest rate on your cash? The table below features term deposits with some of the highest interest rates on the market for a six-month term.

Provider

At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]5000$product[$field["value"]]$product[$field["value"]]More details
  • Easy online application
  • Interest can be paid to other institutions
  • Maturity alert by email and phone

Term Deposit - 6 months

  • Easy online application
  • Interest can be paid to other institutions
  • Maturity alert by email and phone
At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]10008$product[$field["value"]]$product[$field["value"]]More details

Online Term Deposit - 12 months

    Annually, At Maturity, Monthly$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]1000031$product[$field["value"]]$product[$field["value"]]More details

    Term Deposit ($10000+) - 12 months

      Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]100031$product[$field["value"]]$product[$field["value"]]More details

      Term Deposit - 12 months

        Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]5000$product[$field["value"]]$product[$field["value"]]More details

        Term Deposit (Platinum Plus Club Members) - 12 months

          At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]50031$product[$field["value"]]$product[$field["value"]]More details

          Term Deposit ($500 - $1mn) - 12 months

            Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]1000$product[$field["value"]]$product[$field["value"]]More details

            Term Deposit ($1000-$499999) - 12 months

              At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]50001$product[$field["value"]]$product[$field["value"]]More details

              Term Deposit ($5k-$25k) - 12 months

                At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]10007$product[$field["value"]]$product[$field["value"]]More details

                Term Savings ($1000-$500000) - 12 months

                  Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]1000031$product[$field["value"]]$product[$field["value"]]More details

                  Term Deposit - 12 months

                    Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]10000$product[$field["value"]]$product[$field["value"]]More details

                    Term Deposit ($10k-$500k) - 6 months

                      At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]100000$product[$field["value"]]$product[$field["value"]]More details

                      Term Investment ($100k-$200k) - 6 months

                        At Maturity, Monthly$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]2500031$product[$field["value"]]$product[$field["value"]]More details

                        Term Deposit - 12 months ($5000-$25000)

                          Annually, At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]10000$product[$field["value"]]$product[$field["value"]]More details

                          Term Deposit ($10k-$500k) - 12 months

                            At Maturity, Annually$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]100031$product[$field["value"]]$product[$field["value"]]More details

                            Term Deposit ($1000+) - 9 month

                              At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]500031$product[$field["value"]]$product[$field["value"]]More details

                              Term Deposit - 12 months

                                At Maturity$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]1000$product[$field["value"]]$product[$field["value"]]More details

                                Term Deposit ($1000+) - 12 months

                                  Important Information and Comparison Rate Warning

                                  All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of March 1, 2024. View disclaimer.

                                  NAB response

                                  Just before midday, the day after the RBA announcement, NAB followed CommBank's lead and said it would not be making cuts to standard variable rates. 

                                  Instead, it announced personal customers would be able to: 

                                  • Pause home loan repayments for up to six months, including a three-month checkpoint. For a customer with a typical home loan of $400,000, this will mean access to an additional $11,006 over six months, or $1,834 per month.
                                  • Access a 10-month term deposit rate of 1.75% p.a. for 10 months, effective March 24. This is for personal customers only, with deposits of $5,000 to $2 million.
                                  • Access fixed home loan rates of 2.39% p.a. for 1-year, 2.29% p.a. for 2- and 3-year, and 2.79% p.a. for 5-year (owner-occupier P&I), effective March 25. First home buyers will have access to a rate of 2.19% p.a., fixed for two years. This delivers reductions of between 10 and 60bps (table below)
                                  • Access over $20bn in redraw and more than $30bn in offset. Note: Around 1 in 2 accounts are at least 6 months ahead based on redraw & offset balance; and 4 in 10 are 12 months ahead.
                                  • Reduce repayments on variable rate loans. 

                                  Similar changes were made for business customers, along with deferment of principal and interest repayments for up to six months and rate cuts of up to 200 basis points.

                                  What they said

                                  NAB CEO Ross McEwan said their focus was to support business and personal customers with their financial needs when they need it most. 

                                  “These measures will provide significant relief to businesses and homebuyers over the next six months as we all deal with this unprecedented situation," Mr McEwan said.

                                  “Businesses in particular need help and they need it now, so we have come through with a range of measures.

                                  "This support will provide cash flow relief so they can stay open, and keep people in jobs. One third of Australia’s small to medium businesses bank with NAB and we are going to be there for them.

                                  “The changes also offer our home loan customers the option to fix their rate at our lowest rate ever, or pause payments to help ease financial pressures.

                                  “NAB is open for business. We continued lending throughout the Global Financial Crisis and we’ll continue to lend through this.”

                                  Westpac response

                                  Shortly after NAB's announcement, Westpac followed suit and announced they would not be making changes to standard variable rates.

                                  Instead, they announced the follow changes: 

                                  • Reduced Fixed Home Loan Rates: A 2.29% p.a. fixed rate home loan for one, two and three years for owner occupied customers on principal and interest repayments with a Premier Advantage Package, effective Friday 27 March.
                                  • Term Deposit special offer of 1.7% p.a. interest for 12 months for all Australians: special rate with interest paid monthly to provide customers with a higher return on their savings (up to $500,000 per customer). For Australians aged 65 years and over the rate will be 2% p.a. for eight months (up to $500,000 per customer). Effective Friday 27 March 2020. Customers can choose to have interest paid monthly to provide them with regular income.
                                  • 2% reduction on overdrafts for new and existing customers, effective Monday 6 April 2020.
                                  • Repayment relief for small business customers: Westpac small business customers who need help to manage their cash flow can defer principal and interest repayments of business term loans for up to six months. Customers will be available to opt-in to this offer online from Monday 23 March 2020.
                                  • Repayment relief for home loan customers. Westpac customers who have lost their job or suffered loss of income as a result of COVID-19 should contact us for three months deferral on their home loan mortgage repayments with extension for a further three months available after review.

                                  What they said

                                  Westpac's Acting CEO Peter King said the bank was determined to assist customers through this extraordinary period. 

                                  "This is a once in a lifetime event and a united response by government, regulators and corporate Australia is exactly what we need," he said. 

                                  "The comprehensive measures announced by the RBA and APRA yesterday provide a genuine economic stimulus by reducing uncertainty and allowing us to continue to support customers with confidence.

                                  "We recognise it is an unsettling time for many Australians and we want our customers to know we're here to support them." 

                                  "As Australia's oldest bank, we have along history of helping customers and communities through times of uncertainty and we are using this experience to put the plans and processes in place to support our business and retail customers through the challenges ahead." 

                                  ANZ response

                                  ANZ was the last of the big four to announce, but the only one to make cuts on variable home loan rates, of 15 basis points. 

                                  For home loan customers it announced a:

                                  • Decrease variable interest home loan rates in Australia by 0.15% p.a across all Variable rate indices, effective from 27 March 2020.
                                  • Introduction of a two-year fixed rate of 2.19% p.a for Owner Occupiers paying Principal & Interest
                                  • Request a deferral of home loan repayments for up to six-months, with a review at three-months, with interest capitalised.

                                  In addition, cuts of 25 basis points were made to small business loans, effective from 27 March 2020, as well as six month deferral of loan repayments. 

                                  What they said

                                  ANZ CEO Shayne Elliott said the package aimed to support Australian business and the people who work for them.

                                  "We understand the impact this crisis is having and ANZ will play a major role in backing Australia’s economy and our customers through these challenging times," he said.

                                  “We have been working with both the Federal Government and our regulators to keep money flowing through the economy and we’ll do all we can to keep businesses afloat and Australians employed, as well as reducing the financial pressure on households.

                                  “Our decision to reduce variable home loan and small business rates is the right thing to do for our existing customers, particularly the significant number of our home loan customers who are self-employed and managing the effects of the COVID-19 crisis on their own businesses.

                                  “The highly competitive fixed-rates being offered will provide customers certainty over repayments with our lowest fixed-rates on record.” 





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