Only a few lenders haven't passed on recent RBA rate reductions
Banks are accelerating their response to interest rate reductions as competition intensifies, with most major lenders now passing on Reserve Bank of Australia (RBA) cuts in full – a marked shift from past practices.
Historically, financial institutions were quick to transfer rate hikes to customers but often delayed or diluted the impact of cuts. Between 2013 and early 2024, the RBA made 10 rate reductions. Of those, Commonwealth Bank, NAB and ANZ fully passed on only four; Westpac did so for two. In contrast, all 13 rate hikes since 2022 were fully implemented by these lenders.
However, since the February 2025 rate cut, major banks have responded more promptly. According to comparison website Finder, most of the 111 lenders it tracks acted swiftly following the RBA’s decision, leading to the site making a list of non-compliant lenders – later updated as those lenders adjusted their rates.
After May’s RBA rate reduction, the number of lagging institutions shrank further. As of early June, only a few lenders had not adjusted their variable mortgage rates. These are Family First Credit Union, La Trobe, Laboratories Credit Union, and Reduce.
On a typical Australian home loan of just over $600,000, a 0.25-percentage-point rate reduction can equate to an annual saving of roughly $1,200. A half-point cut could double that figure, benefiting borrowers with larger balances even more significantly.
According to Graham Cooke (pictured above), head of consumer research at Finder, lenders are being driven by competitive pressure. “If one major bank passes on the full cut, others are often pressured to do the same to avoid losing customers,” he said.
Cooke also emphasised the importance of refinancing in a more competitive environment. “Even if the full cut isn’t passed on by your current lender, the competitive environment means there will likely be better deals available elsewhere,” he said. “This makes refinancing crucial for homeowners looking to maximise their savings.
“A reduction of even half a per cent can be the difference of thousands of dollars a year. Shop around to find a variable home loan that offers a lower interest rate than your current provider. The very lowest rates now have a ‘5’ in front of them.”
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