Variable mortgage customers with Commonwealth Bank and ANZ begin to see lower repayments, following the Reserve Bank of Australia’s third interest-rate cut this year. NAB and Westpac will follow suit in the coming days, easing pressure on millions of Australian households.
Australians holding variable-rate mortgages with the nation’s biggest banks are beginning to feel the effects of the Reserve Bank of Australia’s (RBA) recent interest-rate reduction. The move marks the third cut in the RBA’s current monetary easing cycle and comes as mortgage stress continues to rise amid sustained cost-of-living pressures.
The new rates are expected to deliver tangible savings for many households, particularly those with large loan balances. While the changes are being rolled out in phases across the big four banks, the reductions have already begun to take effect for many customers.
Rate Reductions Take Effect for Major Lenders
The RBA’s decision to cut the cash rate by 25 basis points to 3.60 per cent on 12 August is now translating into direct financial relief for mortgage holders. According to NewsWire, customers of Commonwealth Bank and ANZ are the first among the big four to see a reduction in their variable interest rates, with the cuts becoming effective from today.
CBA has also reduced its fixed mortgage rates. Customers fixing their rates for one year will now pay 5.49 per cent, while three-year fixed loans have been cut to 5.34 per cent. Five-year fixed rates are down to 5.94 per cent. The most significant drop was recorded on two-year interest-only loans, now available at 5.69 per cent following a 45 basis point cut.
NAB customers will experience the 0.25 per cent reduction starting Monday, 25 August. Westpac has confirmed that it will apply the full rate cut to both mortgage and savings products, with variable mortgage rates dropping four days after savings rates take effect on 22 August.
Savings Potential for Borrowers Varies Widely
The rate cuts are expected to deliver noticeable monthly savings, particularly for borrowers with substantial loan balances. According to comparison site Canstar, a customer with a $500,000 loan paying principal and interest over 25 years will save approximately $74 per month. Those with a $1 million loan stand to save around $148 per month.
These figures compound when taking into account the two earlier RBA cuts this year, in February and May. In total, borrowers could now be saving up to $226 per month on a $500,000 loan and up to $453 per month on a $1 million loan.
While 79 lenders have passed on the RBA’s latest cut in full, Canstar data also reveals discrepancies in implementation. Some lenders, like Athena and Unloan, reduced rates almost immediately, while others are delaying the changes until early September. Meanwhile, customers with Aussie Home Loans are seeing a comparatively modest reduction of just 10 basis points.
