Bank Responses

Following the RBA's announcement, many lenders have begun passing on the rate cut to their customers:

1. Big Four Banks
   • Commonwealth Bank, ANZ, NAB, and Westpac quickly announced they would implement the full 25-point reduction1.
   • CBA's new lowest rate is 5.90%, effective February 28, 202516.
   • Westpac's changes will come into effect on March 4, 20257.
2. Other Lenders
   • Many other banks and financial institutions have also announced rate cuts, including:
     • Adelaide Bank (5.99%, effective March 7)
     • AMP (5.89%, effective February 28)
     • Aussie Home Loans (5.88%, effective March 7)
     • Bank Australia (5.13% for Clean Energy Home Loan only, effective March 4)1

Impact on Borrowers

The rate cut is expected to provide some relief to Australian homeowners:

• A 0.25% rate reduction could save households around $100 a month on a $600,000 loan3.
• Borrowers with variable-rate home loans whose lenders have passed on the reduction will see decreased monthly repayments2.

Market Outlook

Economists and financial experts have weighed in on the rate cut and its implications:

• The Australia Institute suggests that this cut should have happened months ago and that further cuts may be necessary3.
• Some of the lowest variable home loan rates now start with a "5", indicating a more competitive lending environment12.

Next Steps for Homeowners

In light of these changes, homeowners are advised to:

1. Check if their lender has passed on the full rate cut2.
2. Compare home loan rates across different lenders2.
3. Consider refinancing if their current rate is significantly higher than available offers2.
4. Make extra repayments if possible to take advantage of lower rates and reduce overall interest costs2.

As the situation continues to evolve, borrowers should stay informed about potential future rate changes and their impact on the housing market.