Banks Didn’t Pass on the RBA Cut?

For the second month in a row, Australia’s cash rate has been cut by the Reserve Bank of Australia (RBA). As first home buyers, it is important to understand the cash rate as it can influence the interest rates available for your mortgage, how much interest your savings may earn, and is also connected with inflation, jobs, and the overall health of Australia’s economy.

Generally, the RBA will cut the cash rate if they are trying to boost economic activity and encourage more spending and lending. Alternatively, the cash rate is raised if they are trying to slow down growth and inflation.

Last month was the first cut in almost three years, and a further reduction from 1.25% to an historical low of 1.00% in July 2019. All four of the big banks – ANZ, Commonwealth, NAB and Westpac – have agreed to pass on the interest rate cut, but only one of them in full. The Commonwealth Bank announced it would pass on the RBA’s rate cut in full for interest-only standard variable rate home loans. ANZ will be passing on the rate cut in full to their customers this month, while the other two banks will pass on the cut at various rates.

Lower interest rates on mortgages means increased affordability and more savings available for people with mortgages. For first home buyers, it may mean that lenders have more affordable options available for you or that your borrowing power has the potential to increase in an historically low rate environment. It is important to keep abreast of rate cuts and their impact on you – talk to the team at Smart Home Deposit or your mortgage broker to see how you can take advantage of historically low rates and secure a more affordable home loan.

You can reach our Customer Success team via phone at 1300 403 204 or message the team at We look forward to helping you achieve your Smart Home Deposit goals!