Australia’s four major banks — Commonwealth Bank, Westpac, ANZ, and NAB — have responded swiftly to the Reserve Bank of Australia’s (RBA) latest cash rate cut, each passing the full 0.25% reduction on to mortgage customers. But while the news is welcome, the real financial impact depends on what you do next.
At Boa & Co. Chartered Accountants, we help our clients understand not just what the banks are doing, but how to turn these changes into smart financial decisions.
Why This Rate Cut Matters
On Tuesday, the RBA lowered the cash rate from 4.10% to 3.85%, marking the second rate cut in 2025. This is the first time the rate has dropped below 4% since May 2023 — a signal that the central bank is easing pressure on borrowers as inflation moderates.
In response, all four major banks announced a corresponding 0.25% cut to their variable mortgage rates:
- NAB acted within minutes of the announcement.
- CBA and ANZ will apply the change from May 30.
- Westpac will follow on June 3.
But there’s a catch — only Westpac will automatically reduce monthly repayments. For customers with NAB, CBA, and ANZ, action is required: you’ll need to call, visit a branch, or go online to activate lower repayments.
Keep Paying More — or Free Up Cash?
If you do nothing, your repayments will stay the same, which means you’ll pay down your home loan faster and save on interest. For example, NAB reports that on a $550,000 mortgage, keeping repayments the same after this cut could save around $83,000 in interest and shorten your loan term by two years.
In fact, more than 95% of NAB’s customers chose to maintain their repayment levels after the previous February cut, using the opportunity to get ahead on their loans. Still, for many households, freeing up cash flow now — especially with the rising cost of living — could offer much-needed breathing room.
At Boa & Co., we help you evaluate both scenarios so you can make the right choice for your financial situation — whether it’s reducing your repayment, accelerating debt reduction, or optimising your cash flow.
What About Deposit Rates?
So far, only Westpac has announced a 25-basis-point cut to deposit accounts like eSaver and Westpac Life. The other banks are expected to follow. This means depositors may earn slightly less interest, making it even more important to have a strategic financial plan.
Boa & Co. can help you manage your investment and savings portfolio efficiently in this changing interest rate environment.
Don’t Rely on Assumptions — Act with Confidence
Many borrowers may not realise they need to take proactive steps to benefit from rate changes. Relying on bank systems or waiting too long could mean missing out on valuable opportunities.
Whether you’re considering adjusting repayments, refinancing, or exploring investment property strategies, the experienced team at Boa & Co. is here to help you navigate the numbers and make the most of current market conditions.
Speak with Boa & Co. Chartered Accountants today to review your mortgage and cash flow strategy. We’ll help you make smart, informed decisions that support your long-term goals. Call us on 1300 952 286, email us at [email protected], or visit www.boanco.com.au to book your consultation.