Following the Reserve Bank of Australia's 0.25% rate cut from 3.85% to 3.60% on August 12, 2025, we've analysed how all 110+ Australian lenders are responding. While the major banks have grabbed headlines, several smaller lenders are offering significantly better deals, with some even exceeding the RBA's cut. Here's everything you need to know about who's passing on the savings and who's keeping the profits.

Quick Summary

All Big Four banks passing on full 0.25% cut
12 lenders offering MORE than the RBA cut (up to 0.35%)
11 lenders passing on partial cuts only
Major banks outperformed by smaller lenders
Best new rates starting from 5.24% for owner-occupiers
Average borrower saves $1,056 annually on $600K loan

The Big Four Banks: Mixed Response

Commonwealth Bank (CBA)

Rate Cut Passed: Full 0.25% for all home loans
New Variable Rate: 6.29% p.a. (was 6.54%)
Investment Rate: 6.69% p.a. (was 6.94%)
Effective Date: August 22, 2025
Special Offer: No current cashback offer

CBA was one of the first to respond, passing on the full cut to all borrowers. However, the bank no longer offers cashback incentives, having withdrawn this offer earlier in the year.

Westpac

Rate Cut Passed: Full 0.25% across all loans
New Variable Rate: 6.24% p.a. (was 6.49%)
Investment Rate: 6.64% p.a. (was 6.89%)
Effective Date: August 26, 2025
Bonus: 12-month fee waiver for new customers

ANZ

Rate Cut Passed: Full 0.25%
New Variable Rate: 6.36% p.a. (was 6.61%)
Investment Rate: 6.76% p.a. (was 7.01%)
Effective Date: August 22, 2025
Special Offer: $2,000 refinance cashback (up to 80% LVR)

ANZ passed on the full 0.25% cut and is offering a $2,000 cashback for eligible refinance customers with loans over $250,000 and LVR up to 80%.

National Australia Bank (NAB)

Rate Cut Passed: Full 0.25%
New Variable Rate: 6.27% p.a. (was 6.52%)
Investment Rate: 6.67% p.a. (was 6.92%)
Effective Date: August 25, 2025
Additional: Free redraw facility and offset account

The Outperformers: Lenders Going Above and Beyond

These lenders are passing on MORE than the RBA's 0.25% cut, aggressively competing for market share:

Top Performers - Cutting 0.30-0.35%

Athena Home Loans

Cut: 0.35% (0.10% extra)
New Rate: 5.24% p.a. (market leading)
No ongoing fees

Tic:Toc Home Loans

Cut: 0.32%
New Rate: 5.29% p.a.
18-minute conditional approval

Well Home Loans

Cut: 0.30%
New Rate: 5.34% p.a.
100% online process

Unloan

Cut: 0.30%
New Rate: 5.44% p.a.
Owned by CommBank but independent rates

Second-Tier Banks: Strong Competition

Macquarie Bank

Rate Cut: Full 0.25%
New Basic Rate: 5.54% p.a.
Premier Rate: 6.04% p.a. (with offset)
Special: No application fees until September 30

ING

Rate Cut: Full 0.25%
New Rate: 5.59% p.a. (Orange Advantage)
Requirement: Must deposit $1,000+ monthly
Benefit: Additional savings account benefits

Bank of Queensland

Rate Cut: 0.22%
New Rate: 6.12% p.a.
Regional Offer: Extra 0.05% off in Queensland

Credit Unions and Mutual Banks: Member Benefits

Many customer-owned banks are passing on the full cut plus additional member benefits:

Standout Mutual Banks

Greater Bank: 5.49% p.a. (0.28% cut)
Newcastle Permanent: 5.64% p.a. (full cut + loyalty discount)
Heritage Bank: 5.69% p.a. (full cut)
People's Choice: 5.74% p.a. (full cut)
Beyond Bank: 5.79% p.a. (full cut)

The Laggards: Who's Holding Back?

These lenders are passing on less than the full cut or delaying implementation:

Partial or No Cuts

Pepper Money: 0.15% cut only (specialist lender)
La Trobe Financial: 0.10% cut (non-conforming loans)
Bluestone: 0.12% cut (adverse credit specialist)
Liberty Financial: 0.18% cut
Resimac: Reviewing, no immediate cut announced

Fixed Rate Changes: New Landscape

Fixed rates are also dropping, with some lenders offering attractive deals:

Best Fixed Rates (2 Years)

Lender	Rate	LVR
Athena	5.04%	Up to 80%
ING	5.14%	Up to 80%
CBA	5.24%	Up to 90%
Westpac	5.29%	Up to 90%
NAB	5.34%	Up to 95%

Regional and Specialist Lenders

Regional Banks Making Moves

Bendigo Bank: Full cut, 5.89% p.a., community cashback program
Suncorp: Full cut, 5.94% p.a., package discounts available
AMP Bank: 0.27% cut, 5.72% p.a., professional packages
MyState Bank: Full cut, 5.84% p.a., Tasmania/ACT focus

Online-Only Lenders

Homestar: 5.39% p.a., fully digital process
Nano: 5.44% p.a., no credit scoring
Lendi: 5.49% p.a., broker platform rates
Reduce Home Loans: 5.52% p.a., no frills option

What This Means for Borrowers

Immediate Actions to Take

Check your lender's response: Not all cuts are equal
Compare the market: Differences of up to 1.5% between lenders
Negotiate with your bank: Use competitor rates as leverage
Consider refinancing: Average savings of $3,000+ annually
Look beyond the Big Four: Smaller lenders offering better deals

Refinancing Sweet Spots

You should strongly consider refinancing if:

Your current rate is above 6.25%
Your lender passed on less than 0.20%
You're with ANZ or other partial-cut banks
You haven't reviewed your loan in 2+ years
You want to access equity for investment

Market Analysis: Why the Varied Response?

Factors Influencing Bank Decisions

Funding costs: Term deposit rates still elevated
Competition: Battle for market share intensifying
Margin pressure: Banks protecting profitability
Regulatory capital: APRA requirements affecting pricing
Customer segments: Different strategies for different borrowers

Expert Commentary

"The disparity in bank responses shows the market is more competitive than ever. Borrowers who shop around can save thousands, while those who stay passive are subsidising better deals for switchers." - Sally Tindall, Research Director, RateCity

"We're seeing a clear divide between banks prioritising market share versus margins. The digital disruptors are using this as an opportunity to capture customers from the majors." - Martin North, Principal, Digital Finance Analytics

Property Market Implications

Immediate Impact

Borrowing capacity: Increased by approximately 5%
Auction activity: Clearance rates expected to rise 5-10%
First home buyers: Can afford $25,000 more on average
Investor activity: Returning despite smaller cuts

Price Forecast Updates

Leading property analysts have revised their forecasts following the varied bank responses:

CoreLogic: 6-8% growth nationally (was 4-6%)
Domain: Sydney +7%, Melbourne +5%
PropTrack: Perth and Brisbane to lead with 10%+ growth
SQM Research: Rental yields to compress further

Special Offers and Incentives

Many lenders are sweetening their rate cuts with additional incentives:

Current Refinance Incentives

ANZ: $2,000 cashback (up to 80% LVR, $250K+ loans)
Westpac: 12 months fee waiver ($395 value)
Greater Bank: $3,000 cashback for loans over $500K
IMB: Up to $4,000 cashback (loans $750K+)
Newcastle Permanent: $3,000 cashback ($500K+, <80% LVR)
Bank Australia: $1,500 cashback + carbon offset

State-by-State Best Rates

Some lenders offer location-specific deals:

Regional Variations

NSW: Teachers Mutual Bank - 5.44% (education workers)
VIC: Bank First - 5.49% (emergency services)
QLD: QBANK - 5.54% (state employees)
WA: P&N Bank - 5.59% (local members)
SA: People's Choice - 5.64% (credit union members)

Looking Ahead: Next RBA Meeting

With varied responses to this cut, what happens next?

November 5 RBA Meeting: Markets expecting another 0.25% cut to 3.35%
Bank preparedness: Most flagging "wait and see" approach
Competition heating up: More aggressive offers expected
Fixed rates: May drop below 4.75% if cuts continue

How to Get the Best Deal Now

Your Action Plan

Document your current rate: Know exactly what you're paying
Calculate switching costs: Break fees, discharge fees, new loan costs
Get multiple quotes: Aim for at least 5 lenders
Negotiate hard: Banks have discretion on rates
Consider a broker: Access to 40+ lenders and exclusive rates
Act quickly: Best offers are time-limited
Read the fine print: Watch for honeymoon rates
Factor in features: Offset, redraw, portability

The Bottom Line

The RBA's rate cut from 3.85% to 3.60% has revealed a highly competitive lending market. With all Big Four banks passing on the full cut, the real winners are borrowers who shop around. The difference between the best and worst rates is now over 1.5%, translating to over $9,000 annually on a $600,000 loan.

With all major banks passing on the full cut, competition has intensified. Digital lenders like Athena and Tic:Toc are leading the charge with rates starting from 5.24%, while the major banks' rates remain above 6.2%.

For existing borrowers, this is a critical moment to review your loan. With the cash rate now at 3.60% - its lowest since April 2023 - if you're paying above 6%, you're likely leaving money on the table. The refinancing market is the most competitive it's been in years, with cashback offers, fee waivers, and aggressive pricing all available to those who act.

Rate Review Alert

Don't accept a partial rate cut. Our analysis shows the average refinancer is saving $4,200 per year by switching to a more competitive lender. With over 110 lenders in the market, there's never been a better time to review your options.

Compare Your Rate Now

Note: Rates and offers mentioned are current as of August 13, 2025, following the RBA's decision on August 12, 2025 to cut the cash rate from 3.85% to 3.60%. Individual rates depend on loan amount, LVR, and borrower circumstances. This article provides general information only and does not constitute financial advice. Always compare multiple lenders and consider your individual circumstances before making decisions.