After last month’s surprise rate hold, it was widely anticipated that the Reserve Bank of Australia (RBA) would deliver another dose of relief for mortgage holders. At its August board meeting, the RBA cut the official cash rate by 25 basis points, bringing it down to 3.60%—the lowest level since April 2023.
This is the third rate cut of 2025, and while it’s welcome news for borrowers, the real question is: will your lender pass it on—and when?
Why the RBA Rate Cut
RBA Governor Michele Bullock and the board made a unanimous decision to cut rates, citing easing inflation and a softening labour market. The RBA’s statement noted that inflation is trending back toward the 2–3% target range, and that monetary policy needed to remain responsive to global uncertainty.
The RBA governor went on to acknowledge the cut comes as “households are still feeling the pain of higher costs”.
“The board will keep doing what it needs to do to keep inflation down and maintain a healthy jobs market because when inflation is low and stable and people can get jobs; it’s good for households, it’s good for the community, and it’s good for the broader Australian economy.”
Treasurer Jim Chalmers said the decision was “welcome relief” for borrowers and would “put more money in the pockets of people who are under pressure”.
Economists are now predicting the cash rate could fall to around 3% by early 2026, with more cuts potentially on the horizon.
Here’s the full media statement from the RBA.
Which Lenders Are Passing the Rate Cut—and When
Not all lenders move at the same pace. Here’s what we know so far:
- Macquarie Bank: First to act, passing on the full 0.25% cut from August 15.
- ING: Will reduce rates from August 26.
- Commonwealth Bank & ANZ: Will reduce variable rates from August 22.
- NAB & Westpac: Following suit on August 25 and 26, respectively.
⚠️ Important: Some banks, including CBA, require you to contact them if you want your repayments adjusted. Otherwise, they’ll keep your repayments the same—something we actually recommend (more on that below).
What This Means for You
If you’re on a variable home loan, this cut could mean real savings. For example:
| Loan Amount | Old Repayment | New Repayment | Monthly Savings |
|---|---|---|---|
| $500,000 | $3,145.53 | $3,070.44 | $75 |
| $750,000 | $4,718.30 | $4,605.66 | $112.64 |
| $1,000,000 | $6,291.06 | $6,140.88 | $150.18 |
But here’s the kicker: if you keep your repayments the same, you’ll pay off your loan faster and save thousands in interest.
Why You Should Keep Your Repayments the Same
At Fox Mortgages, we always encourage clients to maintain their current repayment level after a rate cut. Why?
- ✅ You’re already used to the payment.
- ✅ The extra amount goes straight to your principal.
- ✅ You’ll save over $24,000 in interest on a $500,000 loan (25 years remaining).
- ✅ You’ll shave 1.25 years off your loan term.
It’s a simple strategy that builds equity faster and gives you more financial freedom down the track.
What Should You Do Now?
- ✅ Check if your lender is passing on the cut
✅ Contact your bank if you want to adjust repayments
✅ Consider keeping repayments the same
✅ Review your rate—there may be better deals out there You’re already used to the payment.
At Fox Mortgages, we work with a wide panel of lenders and can help you compare your options. Whether you’re refinancing, buying, or just want to make sure your loan is working for you, we’re here to help.
📞 Call us on 08 9304 9682 or book an appointment today.
Bottom line? The RBA has done its part. Now it’s time to make sure your lender—and your loan—are working in your favour.