NAB, ANZ, CBA and Westpac all move to pass on the Reserve Bank’s 0.25 percentage point rate cut. The reduction, now placing the cash rate at 3.85%, marks the lowest level since May 2023.
The Reserve Bank of Australia (RBA) has lowered the cash rate from 4.1% to 3.85%, the first change since holding steady in April. The decision, announced on Tuesday, aims to stimulate borrowing and investment amid signs of slowing economic growth.
The response from Australia’s major banks has been swift. Each of the Big Four—NAB, ANZ, Commonwealth Bank and Westpac—confirmed they would implement the 0.25 percentage point rate cut across home loan products. The changes take effect in late May and early June, reflecting the RBA’s influence on commercial lending practices.
All Major Banks Align Home Loan Rate Cuts With Rba Decision
National Australia Bank (NAB) was the first to announce that it would lower its standard variable home loan interest rate by 0.25% per annum, effective 30 May. Unlike some institutions, NAB will not automatically reduce customer repayments, allowing borrowers to pay down their loans faster if they choose.
Commonwealth Bank of Australia (CBA) followed, confirming its own 0.25% cut to home loan variable rates from the same date. In addition, CBA announced reductions across business lending products, including the Variable Base Rate, Residential Equity Rate and Overdraft Reference Rate.
According to CBA’s business banking executive, Mike Vacy-Lyle, the rate change reflects an effort to support business customers during challenging conditions. “We also know that some businesses are finding it tough, and we have a range of measures available for businesses facing difficulty,” he said.
ANZ has also confirmed that the 0.25 percentage point cut will apply to its variable rate home loans, with changes taking effect on 30 May. Similarly, Westpac will implement the cut for both new and existing mortgage customers, albeit slightly later, from 3 June.
Broader Impact Includes Deposit and Business Lending Products
In a broader move, CBA stated that the 0.25% cut will apply not only to home loans but also to its suite of business lending products. These include BetterBusiness Loans and Business Overdrafts, which are used by small and medium-sized enterprises across Australia.
Westpac announced changes for deposit customers as well. Its Westpac Life total variable rate with bonus interest will drop to 4.50% per annum. Likewise, the eSaver introductory rate for new online applicants will fall by the same margin, effective 30 May.
Macquarie Bank, while not part of the Big Four, also confirmed its intention to cut its variable home loan reference rates by 0.25% per annum, effective from 23 May.
The coordinated rate reductions signal a measured response from Australia’s financial institutions, aimed at easing financial pressures for both homeowners and businesses.
