On 12 August 2025, the Reserve Bank of Australia (RBA) cut the official cash rate by 25 basis points to 3.60 per cent. This marks the third cut in just six months, and Australia’s major lenders have already confirmed they will be passing on the full reduction to eligible customers.

For an average $700,000 home loan, the rate drop could mean around $92 in monthly savings or more than $1,100 a year. For many households, that’s extra breathing room in the budget, while for investors, it could help improve cash flow or make additional repayments.

How the banks are responding

• Commonwealth Bank: 22 August

• ANZ: 22 August

• NAB: 25 August

• Westpac: 26 August

Each bank has confirmed its variable home loan rates will fall in line with the RBA’s move. Fixed rates remain unchanged for now.

Refinancing momentum builds

Refinancing activity is continuing to rise, with Q1 2025 figures showing more than $60 billion in loans refinanced — a 3.1 per cent increase on the previous quarter. Many borrowers are taking advantage of lower rates to either shorten their loan term, reduce repayments, or access equity for other purposes.

What this could mean for you

• If you’re on a variable rate, you may see your repayments drop within weeks.

• If your lender isn’t passing on the full cut, it may be worth exploring other options.

• Lower rates could improve borrowing power for those looking to buy or invest.

Next step

With another cut possible in early 2026, now is an ideal time to review your loan. Did you know we offer a complimentary loan review service where we compare your loan to thousands of available options and help you make the most of the current market conditions? Let’s chat.