After months of holding the line, the Reserve Bank of Australia has finally delivered some welcome news for Aussie borrowers. At its May board meeting, the RBA announced a 25 basis point cut to the official cash rate, bringing it down to 3.85%.
While this move may not be the silver bullet for every household, it’s a clear step toward easing financial pressure for the millions of Australians currently on variable home loan rates.
“This rate cut has been anticipated, hopefully all lender s will pass on the full rate cut and quickly to borrowers” said Fox Mortgages Paul Fox. “It’ will be welcome relief to many and a great opportunity for lots of people to pay there loan down sooner”
What Does This Mean for You?
If you’re on a variable home loan, the banks will be next to watch. Many lenders typically pass on cash rate changes—but not all do, and not always automatically.
In fact, several major banks—including CBA, NAB, and ANZ—require borrowers to contact them directly to adjust repayments even after a rate cut is passed on.
Pro Tip from Fox Mortgages: If you have the ability to maintain your existing repayments it will save you thousands of dollars and interest and slash the term of your home loan. Benefits of maintaining your repayments.
If you are unsure on what your strategy should be then get in touch and we can review your position. We’ll help you make sure you’re getting the benefit of the cut and look at whether there are more competitive rates out there for your situation.
How Much Could You Save?
Here’s how the 25 basis point cut could translate to monthly savings:
| Loan Amount | Old Repayment | New Repayment | Monthly Savings |
|---|---|---|---|
| $500,000 | $3,240 | $3,164 | $76 |
| $600,000 | $3,888 | $3,797 | $91 |
| $750,000 | $4,860 | $4,746 | $114 |
| $1,000,000 | $6,480 | $6,328 | $152 |
Based on an average variable rate of 6.06% over 25 years.
Don’t Just Hope Your Bank Will Play Nice
If your lender doesn’t pass on the cut—or if you suspect you could be getting a better deal elsewhere—now is the time to act.
At Fox Mortgages, we deal with a wide panel of lenders and know where the most competitive offers are. We’ll compare your current rate, highlight potential savings, and take the hassle out of switching or renegotiating.
“We’re not here for quick sales — we’re here to give you long-term financial confidence. Our job is to make sure your home loan works for you, not the other way around.” — Kerry Baker, Fox Mortgages Broker
Where to From Here?
While some economists predict more cuts before the end of 2025, nothing is guaranteed. Inflation has eased, but it’s still above the RBA’s 2–3% target, and housing affordability remains stretched—especially in growth hotspots like Perth, Adelaide, and Brisbane.
If you’re not sure what this means for you, let’s chat. Whether you’re looking to refinance, buy your first home, or just want clarity around your repayments, we’re here to help.
Which lender is passing on the cut and when?
We will update as we get the lender decisions:
Above changes are to variable rate home loans.
Looking to review your home loan? Give our team a call on 08 93049682 or book an appointment here.