Recent trends in home loan rates post-RBA rate cut

Numerous lenders have revised their home loan rates in the wake of the Reserve Bank’s (RBA) latest cash rate announcement, which brought the OCR down to 4.1%, where it had been held since November 2023

According to Canstar, the adjustments have seen 29 lenders reduce 232 owner-occupier and investor variable rates by an average of 0.24%, and 12 lenders decrease 177 owner-occupier and investor fixed rates by an average of 0.31%.

Here’s the average home loan rate change by provider from Feb. 24 to March 2.

Current home loan rates landscape

The average variable interest rate for owner-occupiers paying principal and interest now stands at 6.74%.

However, competitive rates are still available, with the lowest variable rate for any LVR being 5.69%, offered by Qudos Bank, Regional Australia Bank, and MOVE Bank. This excludes introductory rates, rates for first-time home buyers, and eco-friendly loan rates.

According to Canstar’s database, the number of rates below 5.75% has increased from 200 to 256 in just one week.

Insights from Canstar

Sally Tindall (pictured), Canstar’s data insights director, provided key insights into the rate adjustments.

“Over 40 lenders have now cut variable rates on the back of the RBA’s cash rate announcement on 18 February, with 29 lenders dropping in just one week,” Tindall said.

This rate cut offers relief to Australian mortgage holders, especially first-home buyers facing significant stress, as entry-level home repayments consume a major part of household income.

Tindall highlighted the competitive edge maintained by CBA and ANZ among the big banks, with notably lower advertised variable rates starting from 5.9% and 5.84% respectively, compared to Westpac and NAB which are higher at 6.19%.

Competitive dynamics among banks

The competitive rate adjustments are not only reshaping customer choices but also influencing the growth dynamics among the major banks:

• CBA and ANZ reported a 6% year-on-year growth in their residential mortgage books from January 2024 to January 2025.
• Westpac and NAB saw a more modest increase of 4% and 3%, respectively, over the same period.
• Macquarie Bank continues to challenge the majors with a competitive lowest advertised variable rate of 5.89% and a significant 16% increase in its home loan book over the past year.

Looking forward

The landscape of home loan rates is rapidly evolving, with 15 lenders currently offering at least one variable rate under 5.75%, excluding special rates. This number is expected to grow as further post-RBA rate changes take effect.

“While most new customer rate changes have been a drop of 0.25%, we’ve seen some deviate from this standard, which is something refinancers or new loan seekers should watch closely,” Tindall said.

According to a recent Mozo report, the rate cut has prompted many borrowers to consider refinancing.