The RBA Board delivered the widely expected cut at the end of its 20 May meeting, the second this year, bringing the nation's key interest rate down to 3.85%.
This marks the lowest level the cash rate has been since April 2023.
Days before the announcement, all four major banks were fully priced a rate reduction was at near-certainty after Q1 trimmed inflation fell below RBA's target band for the first time since 2021.
ANZ, CBA, and Westpac forecast a standard 25 basis point cut, with NAB the outlier expecting a jumbo 50 basis point reduction.
Despite not being fully aligned this time like last time, the big four were all quick on the draw - each passing on the full cut shortly after the RBA's statement.
Here's how each of the big four responded.
NAB
Despite not getting the news it expected NAB was the first to fire, passing on the rate cut in full a mere minute after the RBA released its post-meeting statement.
Effective 30 May, the bank will cut its standard variable home loan by 0.25% p.a.
"We're pleased to announce that the variable rate on NAB home loans is decreasing. This provides some relief for those customers still dealing with cost of living challenges," said Ana Marinkovic, NAB Group Executive for Personal Banking.
NAB does not automatically reduce repayments and instead leave the decision to customers, allowing them choose whether to reduce or keep their repayments.
"More than 95% of NAB customers opted to keep their repayments at the same level when rates last decreased, choosing to pay down their home loan quicker and save more in the long term," Ms Marinkovic said.
A customer with a 30-year mortgage of $550,000 would save $83,000 in interest over the life of the loan and pay it off two years earlier if they kept repayments the same following a 0.25% reduction in rates.
Should a NAB customer decide to pocket the savings this time, they could request changes to their new minimum via the bank's mobile app.
CBA
CBA will lower its variable home loan rates by 0.25% p.a., effective 30 May, passing on the rate cut in full.
"Today's decision will help to deliver some much-needed additional relief for many Australians with a mortgage," said Angus Sullivan, Group Executive of Retail Banking Services at CBA.
"When combined with the February rate cut this change should free up some more cash flow for homeowners who need it."
CBA expects its home loan customers will finally start to see "a more meaningful change" to their mortgage repayments month to month after the second cash rate cut this year.
A day before the RBA May cash rate cut announcement, Australia's largest lender reported only 14% of its eligible home loan customers decided to lower their monthly repayments following the February rate cut.
Majority opted to keep paying the same amount.
"Today's announcement of a 0.25% p.a. rate cut will help to deliver a monthly saving of approximately $80 for home loan customers making principal and interest repayments on an average loan size of $500,000," Mr Sullivan said.
ANZ
ANZ also jumped on board, shedding the full 25 basis points from its variable home loan rates, beginning 30 May.
"The RBA's second rate cut will be another welcome reprieve for our home loan customers, who have been facing high cost of living pressures for sometime," said Maile Carnegie, ANZ Group Executive Australia Retail.
"While Australians have shown great resilience, facing economic challenges directly and adapting to rising costs and uncertainty, some may still be struggling.
"We remain committed to supporting our customers through tailored solutions and urge them to reach out sooner rather than later to discuss options for any additional support required," Ms Carnegie added.
ANZ is currently reviewing other interest and deposit rates.
Westpac
Westpac was the last of the four majors to join the pack and also the last one among its peers to kick off its home loan rate cut.
The bank confirmed that a 0.25% p.a. reduction on its variable home loan rates will take effect on 3 June.
Westpac, in a surprising move, first announced rate adjustments to its savings account products.
Effective 30 May, the standard variable bonus rate of Westpac Life will be cut by 25 basis points to 4.10% p.a.
The base variable rate will remain unchanged at 0.40% p.a.
This brings the total variable interest rate available to 4.50% p.a., provided customers meet the bonus rate criteria, which include making a deposit into the account each month.
For Westpac eSaver, the bank applied the cut to the savings account’s five-month introductory rate, dropping from 3.40% p.a. to 3.15% p.a.
The standard variable rate will remain unchanged at 1.00% p.a.
Meanwhile, the bonus rate for the bank’s Spend&Save (exclusively available to 18-29 year olds) has been boosted by 25 basis points to 0.50% p.a.
Composite image courtesy of CBA, NAB, ANZ, and Westpac
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