Australian borrowers may have to wait up to two weeks for the Reserve Bank's latest interest rate cut to be passed on by major banks, despite the RBA announcing a third reduction of the year. The 0.25 percentage point cut, announced on Tuesday, has been matched by 20 lenders including the big four, but only two banks implemented the change immediately.
NAB said it would take 13 days to pass on the cut, longer than the 10 days it took in May, while Westpac announced a 14-day delay. Commonwealth Bank and ANZ will wait 10 days, as they did previously. According to Finder, mortgage holders at the four biggest banks collectively incur an extra $7.5 million in interest per day while rates remain 0.25% higher.
For a borrower with a $750,000 mortgage, the cut will reduce monthly interest payments by $111 once passed on, according to Canstar. However, many customers will not see relief until late August. One first home buyer, Andrew Giraldi, who secured a variable rate from Macquarie, welcomed the bank's commitment to pass on the cut within three days. He and his partner have saved nearly $400 a month since February due to all three cuts, with Macquarie's quick action adding $30 weekly savings.
Canstar data insights director Sally Tindall attributed the delays to complex systems and high customer numbers. She noted that if all banks passed on the cut in full, the average variable rate for owner-occupier loans would fall from 5.79% to 5.54%. Some lenders, like Police Credit Union, already offer rates below 5%, and Tindall suggested more could follow by the end of August.
Fixed-rate loans have also become more competitive, with 17 lenders offering rates under 5% before Tuesday's cut. However, Richard Brown of Mortgage Choice Epping warned that low fixed rates may signal further variable rate reductions. Data from CommBank and Westpac shows 99% of new loans since late 2024 are on variable rates, as borrowers bet on continued declines.
