Variable rates as low as 5.34% expected
More than 65 lenders have now announced changes to their home loan rates in the wake of the Reserve Bank of Australia’s (RBA) May cash rate cut, according to new data from comparison site Canstar.
All lenders who have revealed their plans to date have confirmed they will pass on the full cut to existing variable rate customers.
Pacific Mortgage Group is set to offer the lowest advertised variable rate of 5.34% once the changes take full effect. However, this figure could still shift as additional lenders finalise their responses to the latest RBA rate decision.
Seventeen lenders have committed to offering at least one variable rate below 5.50%, a figure that could rise to more than 30 in the coming days. Around 95% of lenders are expected to provide at least one variable rate under 6%. The average variable rate for existing owner-occupier customers is forecast to settle at 5.81%.
Among the big four banks, Commonwealth Bank, Westpac, and ANZ will each move to a rate of 5.59%, placing them within 0.25 percentage points of the market leader. NAB will follow with a rate of 5.94%. Subsidiary brands have acted more swiftly, with CBA’s Unloan shifting to 5.49%, and NAB’s ubank matching its parent’s 5.59% offering.
Timelines for implementing the rate cuts differ across institutions. CBA, NAB, and ANZ have scheduled changes for June 30, while Westpac plans to update its rates by June 3. These lead times are consistent with the banks’ approach during previous rate adjustments in 2022 and 2023.
Some lenders, including Unloan and Athena, acted immediately by adjusting rates on the same day the RBA made its announcement, May 20. Macquarie has also moved quickly, applying the cut a week earlier than usual.
“Every single lender that has announced its post-May RBA rates has said it will be passing this cut on in full to its existing variable borrowers – a great outcome for these customers,” said Sally Tindall (pictured above), data insights director at Canstar.
She added that by the end of the following week, a majority of variable rate mortgage holders would have benefited from a lower rate. However, Tindall warned that some customers may still face delays.
“On a $600,000 mortgage with 25 years remaining, every day on the higher rate will cost an extra $4 or so,” she said. “If your bank is taking a number of weeks to pass each cut on and we get multiple rate cuts this year, that $4 can actually start to add up.”
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